Problem
Topline Surf Boards manufactures a single product. The standard cost of one unit of this product is as follows:
|
Direct materials: 5 feet at $1.00 per foot
|
5.00
|
|
Direct labor: 1 hour at $5.30 per hour
|
5.30
|
|
Variable manufacturing overhead: 1 hour at $2.80 per hour
|
2.80
|
|
Total standard variable cost per unit
|
13.10
|
During October, 5,800 units were produced. Selected data relating to the month's production follow:
|
Material purchased: 64,000 feet at $0.95 per foot
|
60,800
|
|
Material used in production: 38,200 feet
|
|
|
Direct labor: ? hours at $ ? per hour
|
26,460
|
|
Variable manufacturing overhead cost incurred
|
20,430
|
|
Variable manufacturing overhead efficiency variance
|
1,400 U
|
There was no beginning inventory of raw materials. The variable manufacturing overhead rate is based on direct labor-hours.
Required:
1. For direct materials:
a. Compute the price and quantity variances for October.
b. Prepare journal entries to record activity for October.
2. For direct labor:
a. Compute the rate and efficiency variances for October.
b. Prepare a journal entry to record labor activity for October.
3. For variable manufacturing overhead:
a. For variable manufacturing overhead.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.