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Required information PR 10-47 (Algo) Comprehensive Problem on Variance Analysis (LO 10-1, 10-3, 10-6) [The following information applies to the questions displayed below] Springsteen Company manufactures guitars. The company uses a standard, job-order cost-accounting system in two production departments, In the Construction Department, the wooden guitars are built by highly skilled craftsmen and coated with several layers of lacquer. Then the units are transferred to the Finishing Department, where the bridge of the guitar is attached and the strings are installed. The guitars also are tuned and inspected in the Finishing Department. The diagram below depicts the production process. Each finished guitar contains seven pounds of veneered wood. In addition, one pound of wood is typically wasted in the production process. The veneered wood used in the guitars has a standard price of \$12 per pound The other parts needed to complete each guitar, such as the bridge and strings, cost $15 per guitar The labor standards for Springsteen's two production departments are as follows: Construction Department 6 hours of direct labor at $20 per hour Finishing Department 3 hours of direct labor at $15 per hour The following pertains to the month of July. 1. There were no beginning or ending work-in-process inventories in either production department. 2. There was no beginning finished-goods inventory 3. Actual production was 528 gutars, and 328 guitars were sold on account for $400 each. 4. The company purchased 6,350 pounds of veneered wood at a price of $1250 per pound 5. Actual usage of veneered wood was 4.850 pounds of the wood purchased during July 6. Fnough parts (bridges and strings) to finish 628 guitars were purchased at a cost of $9.420 7. The Construction Department used 3,025 direct-labor hours The total direct-labor cost in the Construction Depsertment was $57,475 8. The Finishing Department used 1.654 direct-labor hours. The total direct-fabor cost in that department was $26.464. 9. There were no direct-material variances in the Finishing Department. PR 10-47 (Algo) Part 3: Complete the following cost variance report... 3. Complete the following cost variance report for July Springsteen Company investigates all variances greater than $5,000 or 5% (Use Exhibit 10-5) Note: Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter " O " for no effect il... zero variance), Round "Percentage of Standard Cost" to 2 decimal places

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