Prince Manufacturing has established the following standards for the production of one unit of product: Direct materials6

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Question:

Prince Manufacturing has established the following standards for the production of one unit of product:

Direct materials6 feet @ $5$30

Direct labor1.5 hours @ $10 15

Fixed overhead1.5 hours @ $2* 3

Variable overhead1.5 hours @ $4* 6

$54

* Rate based on normal activity of 19,500 hours

At the start of the year, the company budgeted and expected to operate at normal capacity and, accordingly, used that as their denominator rate for applying overhead. Based on this, $39,000 in fixed overhead was budgeted. The following actual results were recorded:

Production12,000 units

Fixed overhead $33,000

Variable overhead$69,000

Direct material purchased (71,750 feet)$361,620

Direct material used71,000 feet

Direct labor (17,900 hours used)$182,580

The company uses a standard costing system to account for manufacturing operations

For overhead variance analysis, the company uses a4-way analysismethod andrecords materials price variance at the time of purchase. Compute the following:

1. Direct materials purchase price variance

2. Direct materials usage (quantity) variance (amount and direction)

3. Direct labor rate variance (amount & direction)

4. Direct labor efficiency variance (amount & direction)

5. Variable overhead spending variance (amount & direction)

6.Variable overhead efficiency variance (amount & direction)

7. Fixed overhead spending variance (amount & direction)

8. Fixed overhead volume variance (amount & direction)

JOURNAL ENTRIES:

9) The journal entry to record the purchase of raw materials

10) The journal entry to record the usage of raw materials

11) The journal entry to apply fixed overhead to production

12) ASSUMEthat the company also uses process costing together with standard costing (standard process costing) for its only production department. A batch of 1,000 units was put into production during the month of November. The proper entry to reflect this would be:

13) The journal entry to close the variable overhead variances

14) If the company uses a 2-way overhead analysis, the "controllable" variance (amount & direction) (Name of variance)