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Problem - Straightforward variance analysis
Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows.
Direct materials: 4 units @ $6.50 $26.00
Direct labor: 8 hours @ $8.50 68
Variable factory overhead: 8 hours @ $7.00 56
Fixed factory overhead: 8 hours @ 2.5 20
Total standard cost per unit $170.00
The following information pertains to activity for December:
Instructions:
Compute Arrow's direct material variances.
Compute Arrow's direct labor variances.
Compute Arrow's variances for factory overhead.
Prepare the appropriate journal entries for these transactions if required. If no entry is required, indicate if discourse is required.
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