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A company produces a industrial chemical. At the start of the year, they had the following cost:
Direct material: (10 pounds at $1.60) - $16.00
Direct labor: (0.75 hours at $18.00) - $13.50
Variable overhead: (0.75 at $4.00) - $3.00
Fixed overhead: (0.75 at $3.00) - $2.25
Standard cost per unit: $34.75
XYZ company computes its overhead rates using practical volume, which is 72,000 units. The actual results are as follows:
a. units produced: 70,000
b. direct materials purchased: 744,000 pounds at $1.50 per pound
c. direct materials used: 736,000 pounds
d. direct labor: 56,000 hours at $17.90 per hour
e. fixed overhead: $214,000
f. variable overhead: $175,400
1. calculate the following variances (please show formulas and work)
a. direct materials price and efficiency variances
b. direct labor price and efficiency variances
c. variable overhead price and efficiency variances
d. fixed overhead price and efficiency variances
2. record the following journal entries:
a. material purchases
b. materials used in production
c. direct labor costs incurred in production
d. actual variable overhead costs incurred
e. variable overhead costs applied
f. actual fixed overhead costs incurred
g. fixed overhead costs applied
h. recognition of variable overhead variances
i. recognition of fixed overhead variances
j. closing of all variance accounts
show formulas and work
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