1. James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour. The materials and labor standards for manufacturing the t-shirts are:
Direct materials (6 yards of fabric @ $3 per yard).....................$18
Direct labor (2.4 hours @ $8.00 per hour)....................................17
It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.Refer to Figure 10-9. What is the entry to record the issuance and usage of materials?
a. Work in Process.................................4,500,000
Materials Usage Variance.........................300,000
Materials..........................................................................4,800,000
b. Work in Process.................................4,200,000
Materials Usage Variance.........................300,000
Materials..........................................................................4,500,000
c. Work in Process.................................4,200,000
Materials Usage Variance..................................................300,000
Materials.........................................................................3,900,000
d. Work in Process................................4,500,000
Materials Usage Variance..................................................300,000
Materials.........................................................................4,200,000
2. Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. During 2011, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor.
What is Crawford's fixed overhead spending variance for 2011?
a. $60,000 F
b. $24,000 F
c. $36,000 U
d. $30,000 U