Explorer Manufacturing has the following standard cost sheet for one of its products: Total Direct...
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Accounting
Explorer Manufacturing has the following standard cost sheet for one of its products: Total Direct Materials 5 pounds at $2 per pound $10 Direct Labor 2 hours at $25 per hour $50 VMOH 2 hours at $5 per hour $10 FMOH 2 hours at $20 per hour $40 $110 The company uses a standard cost system and applies factory overhead cost based on direct labor hours and determines the factory overhead rate based on a capacity of 400 units of the product. Explorer has the following actual operating results for the year just completed: Units manufactured 360 Direct materials purchased and used 1,800 pounds $19,800 Direct labor incurred 750 hours $20,250 VMOH incurred $4,800 FMOH incurred $15,800 Before closing the periodic accounts, the (standard cost) entries in selected accounts follow: Account Debit (total) Credit (total) WIP Inventory $153,000 $134,640 FG Inventory $134,640 $111,690 COGS $111,690
Required: Calculate ALL relevant overhead variances and prepare the necessary related journal entries.
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