The Cat's Meow manufactures gourmet cat food. During the month, it manufactured 5,000 cans of tuna, using 0.10 hour of direct labor per can at a rate of $8.00 per hour. The materials and labor standards for manufacturing the cans of tuna are as follows:
Direct materials (1 pound of tuna @ $0.50 per pound) ...................... $0.50
Direct materials (1 can @ $0.35) ......................................................... 0.35
Direct labor (0.20 hour @ $7.00) ......................................................... 1.40
The company actually used 4,900 pounds of tuna at a price of $0.65 per pound. It also purchased 5,000 cans at a price of $0.45 per can.
A. Determine the total materials price variance and whether it is favorable or unfavorable.
B. Determine the materials usage variance for tuna and whether it is favorable or unfavorable.
C. Determine the labor rate variance and whether it is favorable or unfavorable.
D. Determine the labor efficiency variance and whether it is favorable or unfavorable.
E. Make all necessary journal entries to record the purchase of materials, the issuance and usage of materials, and the direct labor variances.
F. Provide the closing entries.