Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are purchased,
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Question:
Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are purchased, and prorates all variances at yearend. Variances associated with direct materials are prorated based on the balances of direct materials in the appropriate accounts, and variances associated with direct labor and manufacturing overhead are prorated to Finished Goods Inventory and to Cost of Goods Sold CGS on the basis of the relative direct labor cost in these accounts at yearend.
The following information is for the year ended December :
The company had no beginning inventories and no ending WorkinProcess WIP Inventory. It applies manufacturing overhead at of standard direct labor cost.
Finished goods inventory at :
Direct materials $
Direct labor
Applied manufacturing overhead
Direct materials inventory at
Cost of goods sold for the year ended :
Direct materials $
Direct labor
Applied manufacturing overhead
Direct materials price variance unfavorable
Direct materials usage variance favorable
Direct labor rate variance unfavorable
Direct labor efficiency variance favorable
Actual manufacturing overhead incurred
Required:
Compute the amount of Direct Materials Price Variance to be prorated to Finished Goods Inventory at December
Compute the total amount of direct materials cost in the Finished Goods Inventory at December after all materials variances have been prorated.
Compute the total amount of direct labor cost in the Finished Goods Inventory at December after all variances have been prorated.
Compute the total Cost of Goods Sold CGS for the year ended December after all variances have been prorated.
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