(Appendix 10B)Vernon Mills,Inc

question 71

Essay

(Appendix 10B)Vernon Mills,Inc.is a large producer of men's and women's clothing.The company uses standard costs for all of its products.The standard costs and actual costs per unit of product for a recent period are given below for one of the company's product lines:

During this period, the company produced 4,800 units of this product. A comparison of standard and actual costs for the period on a total cost basis is given below:

There was no inventory of materials on hand at the beginning of the period. During the period, 21,120 metres of materials were purchased, all of which were used in production.

Required:

a) (Appendix 10B) For direct materials, compute the price and quantity variances for the period and prepare journal entries to record all activity relating to direct materials for the period.
b) (Appendix 10B) For direct labour, compute the rate and efficiency variances and prepare a journal entry to record the incurrence of direct labour cost for the period.
c) For variable overhead, compute the spending and efficiency variances.

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Definitions:

Control

The ability to shape or control the actions of others and the direction of events.

Brain

The organ located in the head of an animal that controls its thoughts, memory, feelings, and activity.

Positron-Emission Tomography

A nuclear medicine functional imaging technique used to observe metabolic processes in the body.

Brain

The complex organ located in the skull, responsible for cognitive function, neural processing, and control of the body.