You were recently hired as a cost accountant for Procter & Gamble, a manufacturer of household products. The firm uses a standard cost system to control costs. One of the products manufactured is Detergent XZ which is a leading laundry detergent in the US. The main ingredient in Detergent XZ that helps the washing process work better is propylene glycol. The ingredient is purchased as a dry powder and mixed with water to produce the final product, which is sold in one-gallon containers.
												Standard	Actual
	production and sales (gallons of detergent)				1,525,000	1,690,000
	propylene glycol used (pounds)				800,000	850,000
	propylene glycol (total cost in $$)				$1,000,000	$1,037,000
	total DL cost				$2,000,000	$1,825,000
	total DL hours incurred				66,667	61,655
	fixed manufacturing OH incurred				$1,475,000	$1,527,000

(1)	Provide the journal entry for the purchase of the propylene glycol. Assume the quantity purchased is equal to the quantity used in production. (2 points)
	Purchases				$1,037,000
	Accounts Payable					$1,037,000

(2)	Provide the journal entry for the release of propylene glycol to production. (2 points)

(3)	Provide the journal entry for efficiency and spending variances for DL. (4 points)
	Work in Process				$2,216,412
	Labor Rate Variance					$24,662
	Labor Efficiency Variance					$366,750
	Wages Payable					$1,825,000

(4)	Provide the journal entries for fixed manufacturing OH variances. (4 points)

(5)	What is the standard manufacturing cost per gallon for Detergent XZ? (2 points)
	Standard cost of Detergent XZ per gallon
(6)	What is the actual manufacturing cost per gallon for detergent XZ? (2 points)
	Actual cost of Detergent XZ per gallon