… has the following standard cost sheet for its mainproduct:
| DirectMaterials | | 2 feetat | $5 perfoot | $10 |
| DirectLabor | | 0.5 hours at | $10 per hour | $5 |
| Variable overhead | | 0.5 hours at | $2 per hour | $1 |
| Fixedoverhead | | 0.5 hours at | $4 per hour | $2 |
| Standardoverhead | | | | | 18 |
The fixed and variable overhead rates were based on expectedactivity of 3,200 hours.
During the year, the following actual results were recorded:
| Actual resultsfor year: | | | | |
| Production | | | | | | 6,000 units |
| Directmaterials purchases 11,750 feet purchased -11,000 feet used | 61,100 |
| directlabor 2,900 hours | | | 29,580 |
| variable overhead | | | | | 6,000 |
| fixedoverhead | | | | | 10, 500 |
REQUIRED:
- Assuming that the company uses a 4-way overhead analysis,compute the following variances for Minnesota Manufacturing
- Variable overhead spending and efficiency variances
- Fixed overhead spending (budget) and volume variances
- Show the journal entries needed to record the application ofoverhead, actual overhead, overhead variances and disposition ofoverhead variances under standard costing
- Assuming that the company uses a 3-way overhead analysis,compute the spending, efficiency and volume variances.
- Assuming that the company uses a 2-way overhead analysis,compute the budget variance and volume variance.
- Compute the direct materials price and usage variances, and thedirect labor rate and efficiency variances.
- Record all related journal entries for above.
- Compute all direct-cost variances and record journal entriesfor Standard Costing.
