Required: a. Prepare a cost variance analysis for each variable cost for the River Plant. o. Prepare a fixed overhead cost variance analysis. c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are Closed to Cost of Goods Sold at the end of the operating period.
Required: a. Prepare a cost variance analysis for each variable cost for the River Plant. o. Prepare a fixed overhead cost variance analysis. c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are Closed to Cost of Goods Sold at the end of the operating period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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I need help with part b & c please!

Transcribed Image Text:The River Plant of Carlisle, Incorporated produces a particular metal fixture used in aerospace and maritime industries. The following
Information is available for the last operating month:
The plant produced and sold 28,888 fixtures for $72 each. Budgeted production was 30,000 fixtures.
Standard variable costs per fixture follow:
Direct materials: 4 pounds at $4
Direct labor: 0.1 hours at $40
Variable production overhead: 0.4 machine-hours at $20 per hour
Total variable costs.
Fixed production overhead costs:
Monthly budget $815,600
Fixed overhead is applied at the rate of $30 per fixture.
Actual production costs:
$ 16.00
4.00
8.00
$28.00

Transcribed Image Text:Direct materials purchased and used: 106,400 pounds at $4.34
Direct labor: 2,870 hours at $44.00
Variable overhead: 12,000 machine-hours at $19.54 per hour
Fixed overhead
Required:
a. Prepare a cost variance analysis for each variable cost for the River Plant.
b. Prepare a fixed overhead cost variance analysis.
$461,776
126,280
234,480
859,000
c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are
closed to Cost of Goods Sold at the end of the operating period.
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