Slick corporation is a small producer of synthetic motor

Assignment Help Accounting Basics

Reference no: EM13571270

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains twelve quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,561. It also incurred average direct labor costs of $13 per hour for the 4,235 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,050, of which $2,200 was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows:


Direct materials standard price	$	1.30	per gallon
Standard quantity allowed per case		3.25	gallons
Direct labor standard rate	$	16	per hour
Standard hours allowed per case		0.75	direct labor hours
Fixed overhead budgeted	$	2,600	per month
Normal level of production		5,200	cases per month
Variable overhead application rate	$	1.50	per case
Fixed overhead application rate ($2,600 ÷ 5,200 cases)		0.50	per case

Total overhead application rate	$	2.00	per case

Compute the materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to the nearest dollar amount. Omit the "$" sign in your response.)


Materials price variance	$	(Click to select)NoneFU
Materials quantity variance	$	(Click to select)UFNone

b.	Compute the labor rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.)


Labor rate variance	$	(Click to select)FUNone
Labor efficiency variance	$	(Click to select)NoneFU

c.	Compute the manufacturing overhead spending and volume variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)


Overhead spending variance	$	(Click to select)FUNone
Overhead volume variance	$	(Click to select)FUNone

d-1	Prepare the journal entries to charge materials (at standard) to Work in Process. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select)Materials quantity varianceWork in process inventoryMaterials price varianceDirect materials inventoryLabor efficiency varianceLabor rate varianceManufacturing overheadDirect labor
(Click to select)Materials quantity varianceDirect materials inventoryManufacturing overheadDirect laborLabor rate varianceLabor efficiency varianceMaterials price varianceWork in process inventory
(Click to select)Work in process inventoryManufacturing overheadDirect materials inventoryLabor efficiency varianceMaterials price varianceDirect laborMaterials quantity varianceLabor rate variance
(Click to select)Direct materials inventoryWork in process inventoryDirect laborMaterials price varianceMaterials quantity varianceManufacturing overheadLabor efficiency varianceLabor rate variance

d-2	Prepare the journal entries to charge direct labor (at standard) to Work in Process. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select)Labor efficiency varianceMaterials quantity varianceDirect laborMaterials price varianceLabor rate varianceWork in process inventoryManufacturing overheadDirect materials inventory
(Click to select)Labor efficiency varianceDirect laborWork in process inventoryMaterials price varianceManufacturing overheadDirect materials inventoryMaterials quantity varianceLabor rate variance
(Click to select)Manufacturing overheadDirect materials inventoryLabor rate varianceMaterials price varianceMaterials quantity varianceWork in process inventoryDirect laborLabor efficiency variance
(Click to select)Materials price varianceDirect laborDirect materials inventoryMaterials quantity varianceLabor efficiency varianceWork in process inventoryManufacturing overheadLabor rate variance

d-3	Prepare the journal entries to charge manufacturing overhead (at standard) to Work in Process. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select)Overhead spending varianceLabor rate varianceOverhead volume varianceLabor efficiency varianceManufacturing overheadDirect laborDirect materials inventoryWork in process inventory
(Click to select)Manufacturing overheadDirect materials inventoryLabor efficiency varianceOverhead volume varianceDirect laborOverhead spending varianceWork in process inventoryLabor rate variance
(Click to select)Direct laborDirect materials inventoryOverhead volume varianceManufacturing overheadLabor rate varianceOverhead spending varianceWork in process inventoryLabor efficiency variance
(Click to select)Manufacturing overheadLabor efficiency varianceWork in process inventoryOverhead volume varianceDirect materials inventoryLabor rate varianceDirect laborOverhead spending variance

d-4	Prepare the journal entries to transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select)Labor efficiency varianceDirect laborManufacturing overheadOverhead volume varianceFinished goods inventoryWork in process inventoryOverhead spending varianceDirect materials
(Click to select)Finished goods inventoryDirect laborWork in process inventoryOverhead volume varianceManufacturing overheadLabor rate varianceLabor efficiency varianceOverhead spending variance

d-5	Prepare the journal entries to close any over or underapplied overhead to Cost of Goods Sold. (Omit the "$" sign in your response.)

General Journal	Debit	Credit
(Click to select)Cost of goods goldOverhead spending varianceManufacturing overheadFinished goods inventoryLabor efficiency varianceOverhead volume varianceWork in process inventoryLabor rate variance
(Click to select)Finished goods inventoryOverhead spending varianceWork in process inventoryManufacturing overheadCost of goods soldLabor efficiency varianceOverhead volume varianceLabor rate variance
(Click to select)Overhead volume varianceManufacturing overheadLabor rate varianceWork in process inventoryOverhead spending varianceCost of goods soldFinished goods inventoryLabor efficiency variance

Reference no: EM13571270

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