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

question 84

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 direct labor costs incurred and the assignment of direct labor to Work in Process Inventory,including the related variances.

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Definitions:

Spring Brake Priority System

A braking system that utilizes spring force for activation, often as a fail-safe or parking brake mechanism.

Hold-off Chambers

Enclosures within a hydraulic system designed to temporarily contain fluid under pressure, used to modulate system response or delay actuation.

Air Tanks

Containers designed to hold compressed air used in various systems, such as braking systems in large vehicles.

S-cam Foundation Brake

A common type of drum brake system used in heavy vehicles, where an S-shaped camshaft tightens the brake shoes to create braking force.