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24.4A

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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24.4A

Sven Enterprises is a large producer of gourmet pet food. During April, it produced 147 batches of puppy meal. Each batch weighs 1,000 pounds. To produce this quantity of output, the company purchased and used 148,450 pounds of direct materials at a cost of $593,800. It also incurred direct labor costs of $17,600 for the 2,200 hours worked by employees on the puppy meal crew. Manu- facturing overhead incurred at the puppy meal plant during April totaled $3,625, of which $2.450 was considered fixed. Sven's standard cost information for 1,000-pound batches of puppy meal is as follows. $4.20 per pound Direct materials standard price 1,020 pounds Standard quantity allowed per batch $8.50 per hour Direct labor standard rate ... 14 direct labor hours Standard hours allowed per batch $2,800 per month Fixed overhead budgeted 140 batches per month Normal level of production ... $ 9.00 per batch Variable overhead application rate 20.00 per batch Fixed overhead application rate ($2,800 ÷ 140 batches) $29.00 per batch Total overhead application rate Instructions
Transcribed Image Text:Sven Enterprises is a large producer of gourmet pet food. During April, it produced 147 batches of puppy meal. Each batch weighs 1,000 pounds. To produce this quantity of output, the company purchased and used 148,450 pounds of direct materials at a cost of $593,800. It also incurred direct labor costs of $17,600 for the 2,200 hours worked by employees on the puppy meal crew. Manu- facturing overhead incurred at the puppy meal plant during April totaled $3,625, of which $2.450 was considered fixed. Sven's standard cost information for 1,000-pound batches of puppy meal is as follows. $4.20 per pound Direct materials standard price 1,020 pounds Standard quantity allowed per batch $8.50 per hour Direct labor standard rate ... 14 direct labor hours Standard hours allowed per batch $2,800 per month Fixed overhead budgeted 140 batches per month Normal level of production ... $ 9.00 per batch Variable overhead application rate 20.00 per batch Fixed overhead application rate ($2,800 ÷ 140 batches) $29.00 per batch Total overhead application rate Instructions
Instructions a. Compute the materials price and quantity variances. b. Compute the labor rate and efficiency variances. c. Compute the manufacturing overhead spending and volume variances. d. Record the journal entry to charge materials (at standard) to Work in Process. e. Record the journal entry to charge direct labor (at standard) to Work in Process. f. Record the journal entry to charge manufacturing overhead (at standard) to Work in Process. g. Record the journal entry to transfer the 147 batches of puppy meal produced in April to Finished Goods. h. Record the journal entry to close any over- or underapplied overhead to Cost of Goods Sold. nnoduced
Transcribed Image Text:Instructions a. Compute the materials price and quantity variances. b. Compute the labor rate and efficiency variances. c. Compute the manufacturing overhead spending and volume variances. d. Record the journal entry to charge materials (at standard) to Work in Process. e. Record the journal entry to charge direct labor (at standard) to Work in Process. f. Record the journal entry to charge manufacturing overhead (at standard) to Work in Process. g. Record the journal entry to transfer the 147 batches of puppy meal produced in April to Finished Goods. h. Record the journal entry to close any over- or underapplied overhead to Cost of Goods Sold. nnoduced
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