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Problems Specialty Furniture makes custom chairs using a standard costing system. The company expects that...

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Accounting

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Problems Specialty Furniture makes custom chairs using a standard costing system. The company expects that a typical choir should require hours of labor in the construction department, and the standard wage rate is $20 per hour. An average chair uses 32 suare feet of wood, allowing for a certain amount of crap. Because of the nature of the wood, workers must workaround flows in the materials. Se expects to pay $10 per square foot for the wood used to contact its product The company does not store inventory, and buys wood for production as orders are received For the month of October, SF workers in the construction department produced 10 chains using 650 hours and 3,000 square feet of wood. The company boughtwood for $40,000 (and used the entire quantity and incurred labor costs of $12.500. REQUIRED: 1.For the construction department, calculate the price and efficiency variances for the wood and the price and efficiency variances for direct manufacturing labor Be sure to clearly mark each variance as overallocated (0) or underallocated (0) 2.Record the journal entries for the variances incurred 3.Discuss logical explanations for the combination of variances that Specialty Furniture experienced

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