XOBLEM ONE "The Kitty Manufacturing Company uses a standard shoption costing Manufacturing overhead is located to products on the basis of standard direct labor hours costing by beginning of 20x, Kitty adopted the following standards for its manufacturing out Direct materials 3 lb. 5 per lb. Direct labor She a $10 per hour Overhead: Variable $5 per direct labor hour Fixed $10 per direct labore he denominator level for total manufacturing schead per month in 20 is JO direct labor hours. Kitty's expected level of sales is 6000 units at $190 each. Kitty's flexible budget for March 20x was based on this denominator level The records for March indicated the following 1. Direct materials purchased 25,000 lb at $5.20 per pound 2. Direct materials used 23,100 lb 3. Direct labor 40,100 hours $14.60 per hour 4. Total overhead $600.000 (1/2 is variable: the remainder is fixed) 5. Actual production 7,800 units 6. Units sold 5,000 units at $200 per unit REQUIRED: 1. Joumalize the above transactions for March. 2. For March, determine all eight production variances. 3. Calculate the 3-way overhead variances and the 2-way overhead variances. 4. Assuming the contribution margin format, prepare pro forma income statements (an actual income statement, flexible budget income statement, and a static budget income statement.) 5. Calculate the sales price and sales volume variances. 6. An Executive Summary is required. (As consultant for Kitty Manufacturing, what issues would you address and what would you recommend?) XOBLEM ONE "The Kitty Manufacturing Company uses a standard shoption costing Manufacturing overhead is located to products on the basis of standard direct labor hours costing by beginning of 20x, Kitty adopted the following standards for its manufacturing out Direct materials 3 lb. 5 per lb. Direct labor She a $10 per hour Overhead: Variable $5 per direct labor hour Fixed $10 per direct labore he denominator level for total manufacturing schead per month in 20 is JO direct labor hours. Kitty's expected level of sales is 6000 units at $190 each. Kitty's flexible budget for March 20x was based on this denominator level The records for March indicated the following 1. Direct materials purchased 25,000 lb at $5.20 per pound 2. Direct materials used 23,100 lb 3. Direct labor 40,100 hours $14.60 per hour 4. Total overhead $600.000 (1/2 is variable: the remainder is fixed) 5. Actual production 7,800 units 6. Units sold 5,000 units at $200 per unit REQUIRED: 1. Joumalize the above transactions for March. 2. For March, determine all eight production variances. 3. Calculate the 3-way overhead variances and the 2-way overhead variances. 4. Assuming the contribution margin format, prepare pro forma income statements (an actual income statement, flexible budget income statement, and a static budget income statement.) 5. Calculate the sales price and sales volume variances. 6. An Executive Summary is required. (As consultant for Kitty Manufacturing, what issues would you address and what would you recommend?)