Question

I need help with the x's. Please explain how you got those if you can. Thanks

QUESTION 5 Partially correct Mark 76.00 out of 89.00 P Flag question Variances, Entries, and Income Statement A summary of Glendale Company's manufacturing variance report for May 2016 follows Direct material Direct labor Variable overhead Fixed overhead Total Standard Costs (9,200 units) Actual Costs (9,200 units) Variances $52,430 $4,590 U 220,100 700 F 50,550 510 F $47,840 220,800 51,060 9,660 $329,360 9,660 5332,740 $3,380 U Standard material cost per unit of product is 0.5 pounds at $10.40 per pound, and standard direct labor cost is 1.50 hours at $16.00 per hour. The total actual materials cost represents 4,900 pounds purchased at $10.70 per pound. Total actual labor cost represents 14,200 hours at $15.50 per hour. According to standards, variable overhead rate is applied at $3.70 per direct labor hour (based on a normal capacity of 15,000 direct labor hours or 10,000 units of product). Assume that all fixed overhead is applied to work in progress inventory a. Determine the following variances Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable Materials Variances Actual cost: $52,430 Split cost: $50,960 Standard cost: $47,840 Materials price 1,470 Materials efficiency $3,120 Labor Variances Actual cost: $220,100 Split cost: $227,200 Standard cost: 220,800 Labor rate 7,100 Labor efficiency $ 6,400 Variable Overhead Variances $50,550 $52,540 $51,060 1,990 1,480 Actual cost: Split cost: Standard cost: Variable overhead spending $ Variable overhead efficiency $ b. Prepare general journal entries to record standard costs, actual costs, and related variances for material, labor, and overhead General Journal Description Debit Credit Materials inventory 50,960 Materials price variance 1,470 Accounts payable 52,430 To record the purches of direct materials Work in process inventory 47,840 Materials efficiency variance 3,120 Materials inventory 50,960 To record the use of direct materials Work in process inventory 220,800 Labor efficiency variance 6,400 Labor rate variance 7,100 Wages payable 220,100 To record direct labor costs and related cost variances. Work in process inventory 47,840 X ariable overhead efficiency variance 1,480 Variable overhead spending variance 1,990 Manufactruing overhead 142,600 X To apply variable overhead to work in progress and record related cost variances Work in process inventory Manufacturing overhead To apply fixed overhead to work in progress c. Prepare journal entries to record the transfer of all completed units to Finished Goods Inventory and the subsequent sale of 8,400 units on account at $54 each (assume no beginning finished goods inventory) c. Prepare journal entries to record the transfer of all completed units to Finished Goods Inventory and the subsequent sale of 8,400 units on account at $54 each (assume no beginning finished goods inventory) General Journal Description Debit Credit Finished goods inventory Work in process inventory To record completion of units Accounts receivable 453,600 es 453,600 To record sale of units Cost of goods sold Finished goods inventory To record cost of units d. Prepare a partial income statement (through gross profit on sales) showing gross profit based on standard costs, the incorporation of variances, and gross profit based on actual costs. Do not use negative signs with any of your answers below Glendale Company Partial Income Statement For the Month Ended May 31,2016 Sales Cost of goods at standard cost 47,840 X Gross profit at standard cost 47,840 X d. Prepare a partial income statement (through gross profit on sales) showing gross profit based on standard costs, the incorporation of variances, and gross profit based on actual costs. Do not use negative signs with any of your answers below Glendale Company Partial Income Statement For the Month Ended May 31,2016 Sales Cost of goods at standard cost 47,840X Gross profit at standard cost 47,840 X 4,590 700 510 Material Labor Variable overhead Gross profit at actual cost Check

Answer 1

b.

Description	Debit	Credit
Work in process inventory	51060
Variable overhead efficiency variance	1480
Variable overhead spending variance		1990
Manufacturing overhead		50550
To apply variable overhead to work in progress and record related cost variances.
Work in process inventory	9660
Manufacturing overhead		9660
To apply fixed overhead to work in progress.

c.

Description	Debit	Credit
Finished goods inventory	329360
Work in process inventory		329360
To record completion of units.
Cost of goods sold ($329360 x 8400/9200)	300720
Finished goods inventory		300720
To record cost of units.

d.

Glendale Company
Partial Income Statement
For the Month Ended May 31, 2016
Sales		453600
Cost of goods at standard cost		300720
Gross profit at standard cost		152880
Net cost variance
Material	4590
Labor	700
Variable overhead	510	3380
Gross profit at actual cost		149500

Note: Favorable variances are added while unfavorable variances are deducted from the gross profit at standard cost to arrive at the gross profit at actual cost.

Material (1470 + 3120)	4590	U
Labor (7100 - 6400)	700	F
Variable overhead (1990 - 1480)	510	F
Net cost variance	3380	U