(Appendix 10B)Albert Manufacturing Company Manufactures a Single Product

question 37

Essay

(Appendix 10B)Albert Manufacturing Company manufactures a single product.The standard cost of one unit of this product is:
During the month of October,6,000 units were produced.Selected cost data relating to the month's production follow:
There was no beginning inventory of raw materials.The variable overhead rate is based on direct labour-hours.
Required:
a)(Appendix 10B)For direct materials,compute the price and quantity variances for the month,and prepare journal entries to record activity for the month.
b)(Appendix 10B)For direct labour,compute the rate and efficiency variances for the month,and prepare a journal entry to record labour activity for the month.
c)For variable overhead,compute the spending variance for the month,and prove the efficiency variance given above.

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Definitions:

Synthetic Oil

A lubricant consisting of chemical compounds that are artificially made (synthesized) from base chemicals rather than whole crude oil.

Mineral Base Lube

A lubricant derived from mineral oils, used for a variety of applications including engines and machinery for reducing friction.

Incompatible Additives

Chemicals that when mixed with others in vehicle fluids can cause negative reactions or degrade the performance of the fluid.

Differential Carriers

Components that hold the differential gearing in vehicles, allowing wheels to rotate at different speeds.