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Chapter 9-25 Cornerstones of Cost Accounting

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Chapter 9-25 Cornerstones of Cost Accounting;Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet;Direct materials (5lbs. @ $2.60) $13.00;Direct Labor (0.75 hr @ $18.00) 13.50;Fixed overhead (0.75 hr @ $4.00) 3.00;Variable overhead (0.75 hr @ $3.00) 2.25;Standard cost per unit $31.75;Algers computers is overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows;a. Units produced: 53,000;b. Direct materials purchased: 274,000 pounds at $2.50 per pound;c. Direct materials used: 270,300 pounds;d. Direct labor: 40,100 hours at $17.95 per hour;e. Fixed overhead: $161,700;f. Variable overhead: $122,000;Required;1. Compute price and usage variances for direct materials.;2. Compute the direct labor rate and labor efficiency variances.;3. Compute the fixed overhead spending and volume variances. Intercept the volume variance.;4. Compute the variable overhead spending and efficiency varainces.;5. Prepare journal entries for the following;a. The purchase of direct materials;b. The issurance of direct materials to production (Work in Process);c. The addition of direct labor to Work in Process;d. The addition of overhead to Work in Process;e. The incurrence of actual overhead costs;f. Closing out of variances to Cost of Goods Sold

 

Paper#29208 | Written in 18-Jul-2015

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