Foding Corporation has supplied the following information obtained from its standard cost system in May:

Standard price of direct materials . . . . . . . . . . . . . . . . . . . . . . $7 per pound

Actual price of direct materials . . . . . . . . . . . . . . . . . . . . . . ..$6 per pound

Standard direct labor rate . . . . . . . . . . . . . . . . . . . . . . . . . . .$10 per pound

Actual direct labor hours in May . . . . . . . . . . . . . . . . . . . . . . . . 4,000 hours

The following journal entries were made during May with respect to Foding’s standard cost system:

Work in Process Inventory (at standard cost) . . . . . . . . . . . . . . . 9,500

Materials Quantity Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000

Direct Materials Inventory (at actual cost) . . . . . . . . . . . . . . . . . . 9,000

Materials Price Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500

To record the cost of direct materials used in May.

Work in Process Inventory (at standard cost) . . . . . . . . . . . . . . . . . 35,000

Labor Rate Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

Labor Efficiency Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000

Direct Labor (at actual cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000

To record the cost of direct labor charged to production in May.

Work in Process Inventory (at standard cost) . . . . . . . . . . . . . . . . . 28,000

Overhead Spending Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000

Overhead Volume Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000

Manufacturing Overhead (at actual cost) . . . . . . . . . . . . . . . . . . . . 25,000

To apply overhead to production in May.

Instructions

a. Determine the actual quantity of materials purchased and used in production during May.

b. Determine the standard quantity of materials allowed for the production output achieved during May.

c. Determine the actual average direct labor rate in May.

d. Determine the standard direct labor hours allowed for the production output achieved during May.

e. Determine the total overhead costs allowed for the production output achieved during May.

f. Prepare a journal entry to record the transfer of all work in process to finished goods at the end of May.

g. Close all cost variances directly to the Cost of Goods Sold account at the end of May.

h. Was Foding’s production output in May more or less than its normal level of output? How can you tell?