Variances and Journal Entries Jacobs Company manufactures a single product and uses a standard costing system. The nature of its product dictates that it be sold in the period it is produced. Thus, no ending work in process or finished goods inventories remain at the end of the period. However, raw materials be stored and are purchased in bulk when prices are favorable. Per-unit standard product costs are material, $8.40 (4 pounds); labor, $6.40 (0.5 hour); and variable overhead, $4.40 (based on direct labor hours). Budgeted fixed overhead is $54,000. Jacobs accounts for all inventories and cost of goods sold at standard cost and records each variance in a separate account. The following data relate to May when 17,700 finished units were produced. a. Assume Jacobs purchased 69,000 pounds of r materials on account at $2.60 per pound and used 67,000 pounds in May's production, prepare a journal entry to record the purchase of raw materials and a separate journal entry to record the use of raw materials in production. Record these entries using standard costs and include the appropriate materials variances. General Journal Description Work in process inventory Debit Credit 0 0 ° 0 ° 0 ° Materials price variance To record the purchase of direct materials Materials inventory = 0 0 ÷ 0 0 0 0 To record the use of direct materials b. Assuming employees worked 8,900 direct labor hours at an average hourly rate of $12.10, prepare a journal entry to record actual costs, standard costs, and any labor variances. General Journal Description Work in process inventory Wages payable Debit Credit 0 = ° o 0 o To record direct labor costs c. Assuming Jacobs' actual and applied variable overhead was $79,400 and that budgeted and actual fixed overhead incurred was $54,000, prepare a journal entry to record actual and standard overhead costs and any overhead variances. General Journal Description Debit Credit Work in process inventory o Variable overhead spending variance D o ÷ 0 o 0 0 ° To record actual and standard overhead costs