The Wolf Company uses a standard cost accounting system and estimates production for the year to...

The Wolf Company uses a standard cost accounting system and estimates production for the year to be 60,000 units. At this volume, the company's variable overhead costs are $0.50 per direct labor hour.
The company's single product has a standard cost of $30.00 per unit. Included in the $30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours) and $4.80 for overhead. The company's variable overhead costs are $0.50 per direct labor hour.
Production information for the month of March follows:

Number of units produced	4,500
Materials purchased (13,300 yards)	$61,600
Materials used in production (yards)	13,300
Variable overhead costs incurred	$4,380
Fixed overhead costs incurred	$20,400
Direct labor cost incurred ($6.50/hour)	$57,750

Variances

Materials price variance	$3,080U
Materials efficiency variance	880F
Labor price variance	2,310U
Labor efficiency variance	1,440U
Variable OH price variance	240F
Variable OH efficiency variance	120U
Fixed OH price variance	1,400U
Fixed OH volume variance	1,900U

Required:
In the chart above, the fixed overhead variances are given. Provide the calculations to prove those numbers.

Fixed OH price variance:

Fixed OH volume variance:

Record journal entries for the following production transactions (see descriptions in the journal). Note-the variances are computed for you in the chart above.

1.Record direct materials variances, 2.Record direct labor variances, 3.Record the actual variable and fixed overhead incurred. (this is not in your demonstration notes) 4. Record the variable and fixed overhead applied to production. (this is not in your demonstration notes) 5. Record manufacturing overhead variances, 6. Transfer finished goods to CGS, 7. Record Cost of Goods Sold-assume all production was sold for $235,000., 8.Record the closing entry for the variance accounts

Expert Solution

Solution:

Budgeted Fixed Overhead
Total Overhead (60000*$4.80)	288000
Less: Variable Overhead (600002$0.50)	60000
Fixed Cost per Annum	228000
Fixed Cost per month	19000
Fixed Cost per hour (228000/120000)	1.9

Fixed Cost
Manufacturing Overhead Price Variance	Budgeted Fixed Overhead - Actual Fixed Overhead
Actual Fixed Overhead	20400
Budgeted Fixed Overhead (Per month)	19000
Manufacturing Overhead Price Variance	-1400	Unfavorable


Manufacturing Overhead volume Variance	Budgeted Fixed Overhead - Applied/Absorbed OH
Applied OH (450021.9)	17100
Budgeted Fixed Overhead (Per month)	19000
Manufacturing Overhead volume Variance	-1900	Unfavorable

Journal Entries
Raw Materials	58520
Direct Material Cost Variance	3080
Accounts payable		61600
(To Record Price Variance)

Work in Process	59400
Direct Material Efficiency Variance		880
Raw Material		58520
(To record Quantity Variance)
Work in Process	54000
Labor Efficiency Variance	2310
Direct Labor Cost Variance	1440
Factory Labor		57750
(To record labor variances)

Variable Overhead Actual	4380
Fixed Overhead Actual	20400
Various Accounts		24780

Work In Process	21600
Variable Overhead (Applied) (450020.50)		4500
Fixed Overhead (Applied) (450021.9)		17100


Variable Overhead (Applied)	4500
Variable Overhead efficiency Variance	120
Variable Overhead Price Variance		240
Variable Overhead (Actual)		4380

Fixed Overhead (Applied) (450021.9)	17100
Fixed Overhead Price Variance	1400
Fixed Overhead Volume Variance	1900
Fixed Overhead Actual		20400

Finished Goods (4500*30)	135000
Work in Process Inventory		135000

PS: Dear student, Fixed OH Variance and first 6 journal entries are done for you. Hope this helps. For any clarifications kindly use the comment box

ekkarill92 answered 1 year ago

The Rogers Company uses a standard cost accounting system and estimates production for the year to...

The Rogers Company uses a standard cost accounting system and estimates production for the year to be 60,000 units. At this volume, the company's variable overhead costs are $0.50 per direct labor hour. The company's single product has a standard cost of $30.00 per unit. Included in the $30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours). Production information for the month of March follows: Number of units produced 6,000 Materials purchased (18,500 yards)...

Lackawanna Licorice Company uses a standard cost accounting system and applies production overhead to products on...

Lackawanna Licorice Company uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended: Actual variable overhead: $202,920 Actual total overhead: $558,030 Actual machine hours worked: 26,700 Standard variable-overhead rate per hour: $7.90 Standard fixed-overhead rate per hour: $13.20 Planned activity during the period: 26,000 machine hours Actual production: 15,700 finished units Machine-hour standard: Two completed units per machine hour Required:...

uses a standard cost accounting system and applies production overhead to products on the basis of...

uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended: Standard variable-overhead rate per hour: $7.20 Standard fixed-overhead rate per hour: $12.20 Planned activity during the period: 17,000 machine hours Actual production: 11,200 finished units Machine-hour standard: Two completed units per machine hour Actual variable overhead: $156,110 Actual total overhead: $445,030 Actual machine hours worked: 23,300 Required: 1. Calculate the budgeted fixed...

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...

Kansas Company uses a standard cost accounting system. In 2020, the company produced 27,700 units. Each...

Kansas Company uses a standard cost accounting system. In 2020, the company produced 27,700 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,400 direct labor hours. During the year, 131,500 pounds of raw materials were purchased at $0.93 per pound. All materials purchased were used during the year. If the materials quantity variance was $19,665 unfavorable, what was the standard materials quantity...

Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing...

Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances. Materials price variance $1,290 U Labor quantity variance $910 U Materials quantity variance 730 F Overhead variance 830 U Labor price variance 440 U In addition, 8,490 units of product were sold at $9 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $7,580 for the month. Prepare an income statement for management for the month...

Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,500 units. Each...

Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,500 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $11.00. Normal capacity was 49,500 direct labor hours. During the year, 130,000 pounds of raw materials were purchased at $0.90 per pound. All materials purchased were used during the year. (a) If the materials price variance was $1,300 favorable, what was the standard...

Moleno Company produces a single product and uses a standard cost system. The normal production volume...

Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires five direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows: FOH $2,160,000* VOH 1,440,000 * At normal volume. During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of $2,150,400 and actual variable overhead...

Colina Production Company uses a standard costing system. The following information pertains to the current year....

Colina Production Company uses a standard costing system. The following information pertains to the current year. Direct labor hours is the driver used to assign overhead costs to products. Actual production 5,500 units Actual factory overhead costs ($16,500 is fixed) $40,125 Actual direct labor costs (11,250 hours) $131,625 Standard direct labor for 5,500 units: Standard hours allowed 11,000 hours Labor rate $12.00 The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost data...

Kansas Company uses a job costing accounting system for its production costs. The company uses a...

Kansas Company uses a job costing accounting system for its production costs. The company uses a predetermined overhead rate based on direct labor-hours to apply overhead to individual jobs. The company prepared an estimate of overhead costs at different volumes for the current year as follows. Direct labor-hours 150,000 180,000 210,000 Variable overhead costs $ 1,200,000 $ 1,440,000 $ 1,680,000 Fixed overhead costs 612,000 612,000 612,000 Total overhead $ 1,812,000 $ 2,052,000 $ 2,292,000 The expected volume is 180,000 direct...

Question