Question:
(Incomplete data; variances) Quinan Carpentry Co. makes wooden shelves. A small fire on October 1 partially destroyed the records relating to September's production. The charred remains of the standard cost card appear here.
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Standard Quantity
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Standard Price
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Direct material
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3.1 board feet
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Direct labor
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$9.80 per hour
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From other fragments of records and several discussions with employees, you learn the following:
- The purchasing agent's files showed that 50,000 board feet had been purchased on account in September at $1.05 per board foot. He was proud of the fact that this price was $0.05 below standard cost per foot.
- There was no beginning inventory of raw material on September 1 and, since the raw material storage location is apart from the production facility, the fire caused no damage to the remaining raw material. Fourteen hundred board feet of raw material were on hand on October 1.
- The standard quantity of material allowed for September's production was 49,600 board feet.
- The September payroll for direct labor was $39,494 based on 4,030 actual hours worked.
- The production supervisor distinctly remembered being held accountable for 30 more hours of direct labor than should have been worked. She was upset because top management failed to consider that she saved hundreds of board feet of material by creative efforts that required extra time.
a. How many units were produced during September?
b. Calculate direct material variances for September.
c. What is the standard number of hours allowed for the production of each unit?
d. Calculate all direct labor variances for September.
e. Prepare general journal entries reflecting direct material and direct labor activity and variances for September, assuming a standard cost, perpetual inventory system.