Question;ProblemRadford Company uses a standard cost system to record its manufacturing costs in theaccounting records. The company manufactures a product that uses the following standards.Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overhead6 units at $5.00 per unit2 labor hours at $10.25 per hour3 machine hours at $6.50 per hour3 machine hours at $8.25 per hourThe fixed manufacturing overhead is based on a normal capacity of 360,000 machine hours peryear. The actual results for the current year are provided below.Direct materials purchasesDirect materials usedDirect laborActual machine hours usedVariable manufacturing overheadFixed manufacturing overhead900,000 units at a total cost of $4,523,000690,000 units210,000 labor hours at a total cost of$2,150,000320,000Actual cost of $2,100,000Actual cost of $2,625,000The company produced 110,000 units during the year. The company completed 80% of the totalwork in process during the year. The company sold 90% of the finished goods on hand at amarkup of 25% above standard cost. There were no beginning inventories.REQUIRED: (1) Calculate the following manufacturing cost variances, showing all supportingcomputations. Round all calculations to the nearest whole dollar.(a) Direct materials price variance.(b) Direct materials quantity variance.(c) Direct labor rate variance.(d) Direct labor efficiency variance.(e) Variable manufacturing overhead spending variance.(f) Variable manufacturing overhead efficiency variance.(g) Fixed manufacturing overhead spending variance.(h) Fixed manufacturing overhead volume variance.(2) Prepare all the general journal entries, in proper form, that would be required to recordthe transactions in the standard cost system of the company. Assume that variances areisolated at the earliest possible point in the accounting system. Provide a brief explanation foryour entry.
Paper#52989 | Written in 18-Jul-2015Price : $25