Variances, Entries, and Income Statement A summary of Blake Companys manufacturing variance report for June 2016 follows.

			Total Standard Costs (9,200 units)		Actual Costs (9,200 units)		Variances
Direct material			$66,880		$65,100		$1,780		F
Direct labor			77,520		82,800		5,280		U
Variable overhead			34,200		33,000		1,200		F
Fixed overhead			102,600		102,600		-
			$281,200		$283,500		$2,300		U

Standard material cost per unit of product is 4 pounds at $2.20 per pound, and standard direct labor cost is 0.75 hours at $13.60 per hour. Total actual material cost represents 31,000 pounds purchased at $2.10 per pound. Total actual labor cost represents 6,000 hours at $13.80 per hour. According to standards, variable overhead rate is applied at $6 per direct labor hour (based on a normal capacity of 6,000 direct labor hours or 8,000 units of product). Assume that all fixed overhead is applied to work in progress inventory.

a. Determine the following variances:

Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.

Materials Variances
Actual cost:	$Answer
Split cost:	$Answer
Standard cost:	$Answer
Materials price	$Answer	AnswerFU
Materials efficiency	$Answer	AnswerFU

Labor Variances
Actual cost:	$Answer
Split cost:	$Answer
Standard cost:	$Answer
Labor rate	$Answer	AnswerFU
Labor efficiency	$Answer	AnswerFU

Variable Overhead Variances
Actual cost:	$Answer
Split cost:	$Answer
Standard cost:	$Answer
Variable overhead spending	$Answer	AnswerFU
Variable overhead efficiency	$Answer	AnswerFU

b. Prepare general journal entries to record standard costs, actual costs, and related variances for material, labor, and overhead.

General Journal
Description		Debit	Credit
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
Materials price variance		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
To record the purchases of direct materials
Work in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
To record the use of direct materials
Work in process inventory		Answer	Answer
Labor rate variance		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
To record direct labor costs and related cost variances.
Work in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
Manufactruing overhead		Answer	Answer
To apply variable overhead to work in progress and record related cost variances
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
To apply fixed overhead to work in progress

c. Prepare journal entries to record the transfer of all completed units to Finished Goods Inventory and the subsequent sale of 6,400 units on account at $60 each (assume no beginning finished goods inventory).

General Journal
Description		Debit	Credit
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
To record completion of units
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
To record sale of units
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
AnswerAccounts payableAccounts receivableCost of goods soldFinished goods inventoryLabor efficiency varianceManufacturing overheadMaterials efficiency varianceMaterials inventoryMaterials price varianceSalesVariable overhead efficiency varianceVariable overhead spending varianceWages payableWork in process inventory		Answer	Answer
To record cost of units

d. Prepare a partial income statement (through gross profit on sales) showing gross profit based on standard costs, the incorporation of variances, and gross profit based on actual costs.

Do not use negative signs with any of your answers below.

Blake Company Partial Income Statement For the Month Ended June 30, 2016
Sales					$Answer
Cost of goods at standard cost					Answer
Gross profit at standard cost					Answer
Net cost variance
Material				$Answer
Labor				Answer
Variable overhead				Answer	Answer
Gross profit at actual cost					$Answer