Reference no: EM13482207
Seven enterprises is a large producer of gourmet per food. During April, it produced 147 batches of puppy meal. Each batchweights 1,000 pounds. To produce this quantity of output, the company purchase d and used 148,450 pounds of direct materials at acost of $593,800. It also incurred direct labor costs of $17,600for ht 2,200 hours worked by employees on the puppy meal crew. Manufacturing overhead incurred at the puppy meal plant duringApril totaled $3,625, of which $2,450 was considered fixed. Seven's standard cost information for 1,000-pound batches of puppy meal is as follows:
Direct materials standardprice...................................................$4.20per pound
Standard quantity allowed perbatch..............................................1,020 pounds
Direct labor standardrate...........................................................$8.50per hour
Standard hours allowed perbatch..........................................14direct labor hours
Fixed overheadbudgeted...................................................$2,800per month
Normal level ofproduction................................................140batches per month
Variable overhead applicationrate.......................................$9.00 per batch
Fixed overhead application rate($2,800 / 140batches)................20.00 perbatch
Total overhead applicationrate............................................$29.00per batch
Instructions:
a. Compute the materials priceand quantity variances.
b. Compute the labor rate andefficiency variances
c. Compute the manufacturing overhead spending and volume variances.
d. Record the journal entry to charge materials (at standard) to work in process.
e. Record the journal entry tocharge direct labor (at standard) to work in process.
f. Record the journal entry tocharge manufacturing overhead (at standard) to work in process.
g. Record the journal entry totransfer the 147 batches of puppy meal produced in April tofinished goods.
h. Record the journal entry to closeany over-or under applied overhead to cost of goods sold.