Standard Products Company Recognizes Variances from Standards at the Earliest $\quad$

question 139

Essay

Standard Products Company recognizes variances from standards at the earliest opportunity,
and the quantity of direct materials purchased is equal to the quantity used.The following information is available for the most recent month.Assume the allocation base for fixed overhead costs is the number of units.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Direct materials Direct Labor }$
$\begin{array}{lll}\text { Standard quantity } / \text { unit } & 6.00 \mathrm{lbs} . & 2.5 \mathrm{hrs} \\\text { Standard price } / \mathrm{lb} \text {. or } \mathrm{hr} . & \$ 8.10 / \mathrm{lb} . & \$ 8.00 / \mathrm{hr} \\\text { Actual quantity } / \text { unit } & 6.25 \mathrm{lbs} . & 2.8 \mathrm{hrs} \text {. } \\\text { Actual price } / 1 \mathrm{~b} \text {. or } \mathrm{hr} \text {. } & \$ 8.00 / 1 \mathrm{~b} \text {. } & \$ 7.50 / \mathrm{hr} \\\text { Price variance } \$ 562.50 \mathrm{~F} & \$ 1,260.00 \mathrm{~F} &\\\text { Efficiency variance }&\$ 1,822.50 \mathrm{U} & \$ 2,160.00 \mathrm{U}\\\\\text { Static budget volume } & 800 \text { units } \\\text { Actual volume } & 900 \text { units } \\\text { Actual overhead cost } & \$ 11,000\\\text {Standard variable overhead cost }& \$ 5 /\text { unit } \\ \text {unit Standard fixed overhead cost} & \$ 5,600 \\\text { Overhead flexible budget variance } & \$ 900 \mathrm{U} \\\text { Production volume variance } & \$ 700 \mathrm{~F} &\end{array}$

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Journalize the purchase and usage of direct materials including the related variances.

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Definitions:

Strong Ego

A psychological term indicating a person’s sense of self-esteem or self-importance, which is resilient and robust.

Weak Superego

Describes a condition in psychoanalytic theory where an individual's superego is not strong enough to balance the desires of the id, leading to potentially problematic behaviors.

Pleasure Principle

In psychoanalytic theory, the instinctual seeking of pleasure and avoiding of pain to satisfy biological and psychological needs.

Id

In psychoanalytic theory, the component of personality that is driven by immediate gratification and impulses, without moral or logical reasoning.