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West Manufacturing Company uses a standard cost system in its accounting records. The standard costs for...

West Manufacturing Company uses a standard cost system in its accounting records. The standard costs for its one product are as follows:

                     Materials                                    8 pounds at $1.00 =   $ 8.00

                     Direct labor                              1.2 hours at $14.00 =     16.80

                     Variable overhead     1.2 direct-labor hours at $4.00 =       4.80

                     Fixed overhead         1.2 direct-labor hours at $6.00 =       7.20

                     Total standard cost                                                      $36.80

            The standard costs per unit are based on normal capacity of 3,600 direct-labor hours per month. In West’s accounting system, all inventories are recorded at standard costs and variances are recorded in the accounts. Thus, the materials price variance is based on purchases. Overhead variances are calculated using the four-variance method.

            Actual activity and costs for September are as follows:

            Production            2,850                                                                                      units

            Materials purchased            24,000                                                              lbs. at $0.95 per kg.

            Materials used in production            23,500                                                                                      lbs.

            Direct labor payroll            3,550                                                            hours at $14.30 per hr.

            Variable overhead                                                              $14,800

            Fixed overhead                                                                  $22,200

a. Prepare journal entries to record the actual variable overhead, variable overhead applied, and variable overhead variances for September (10pts).

b. Prepare journal entries to record the actual fixed overhead, fixed overhead applied and fixed overhead variances for September (10pts).

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ekkarill92 answered 2 years ago
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