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Watermate is a manufacturer of ceramic bottles. (Click the icon to view the standards.) Last month, Watermate reported the following actual results for the
Watermate is a manufacturer of ceramic bottles. (Click the icon to view the standards.) Last month, Watermate reported the following actual results for the production of 67,000 bottles: (Click the icon to view the actual results.) (Click the icon to view related variances.) C Requirements Use a standard cost accounting system to do the following: 1. Record Watermate's direct materials and direct labour journal entries. 2. Record Watermate's journal entries for manufacturing overhead, including the entry that records the overhead variances and closes the manufacturing overhead account. 3. Record the journal entries for the completion and sale of the 67,000 bottles, assuming Watermate sold (on account) all of the 67,000 bottles at a sale price of $8.50 each. (There were no beginning or ending inventories.) Data table The company has these standards: Direct materials (clay). Direct labour.. 1.1 kg per bottle, at a cost of $0.44 per kg 1/5 hour per bottle, at a cost of $14.20 per $69,550 $33,170 Static budget variable overhead Static budget fixed overhead ... Static budget direct labour hours Static budget number of bottles 10,700 hours ... 49,000 Watermate allocates manufacturing overhead to production based on standard direct labour hours. The standard predetermined variable manufacturing overhead rate is $6.50, and the standard predetermined fixed manufacturing overhead rate is $3.10. Print Done hour I X Data table Direct materials.. Direct labour Actual variable overhead Actual fixed overhead Print 1.3 kg per bottle, at a cost of $0.60 per kg 1/4 hour per bottle, at a cost of $12.90 per hour $95,000 $28,500 Done I Data table Direct materials price variance Direct materials efficiency variance Direct labour price variance Direct labour efficiency variance Total manufacturing overhead variance Overhead flexible budget variance Production volume variance Print Done $ 13,936 U 5,896 U 21,775 F 47,570 U 5,140 F 3,230 U 8,370 F
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