More info Data table a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,700 coffee mugs. c. Actual direct materials usage was 10,000lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 200,000 minutes at a total cost of $34,000. e. Actual overhead cost was $9,000 variable and $31,700 fixed. f. Selling and administrative costs were $120,000. Smith manufactures coffee mugs that it sells to other companies for customizing with their own logos. Smith prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 60,000 coffee mugs per month: Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. quantity; FOH = fixed overhead; SC= standard cost; SQ= standard quantity.) Requirement 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances Begin by journalizing the purchase of direct materials, including the related variance. (Prepare a single compound journal entry.) Requirement 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. overhead.) Requirement 4. Journalize the actual manufacturing overhead and the allocated manufacturing account. (Record debits first, then credits. Select the explanation on the last line of the journal en Begin by journalizing the entry to show the actual manufacturing overhead costs incurred. Journalize the applied manufacturing overhead. Journalize the movement of all production from Work-in-Process Inventory. Requirement 5 . Smith intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? tiring more-skilled, higher-paid labor led to direct labor cost variance. Given the direct labor efficiency variance, it appear that these more-skilled workers performed efficiently. The overall net effect is thus management's decision was