E A D F G 1 Question 1: 12 marks 2 3 RSM222Cheese, Inc., has set the following standards for direct materials and direct labor for each 20-pound bag of Cheese-Be- 4 Good: 5 6 7 Direct materials: 25 pounds of CWhiz-2000 @ $0.08/b. = $ 2.00 8 Direct labor: 0.05 hour @ $32.00/hr. = $ 1.60 Per Bag el 9 10 11 12 The company manufactured 100,000 bags of Cheese-Be-Good in December and used 2,700,000 pounds of CWhiz-2000 and 5,200 direct labor hours. During the month, the company purchased 3,000,000 lbs. of CWhiz-2000 at $0.075 per pound, and 13 incurred a total payroll of $182,000 for direct labor. The company records purchases at standard cost and therefore recognizes 14 material price variances at point of purchase. 15 16 17 18 Required: 19 20 1) Compute the price and usage variances for direct materials, and the rate and efficiency variances for direct labor for the month of December. Round all four answers to nearest dollar 21 22 2) Prepare journal entries (noted below) to record the preceding events for December. Assume materials are paid on account 23 during the month of purchase and settled the following month. 24 25 i) Purchase of Direct Materials 26 ii) Issuance of Direct Materials to production 27 ii) Direct Materials cost for the period 28 29