B prepare the journal entry to apply factory overhead

(b) Prepare the journal entry to apply factory overhead to work in process and record the
variances.
10. Palek Company has adopted the following standards:

Input Total
Direct materials 3 lbs. @ $3.60 per lb. $10.80
Direct labor 5 hrs. @ $12.00 per hr. 60.00
Factory overhead:
Variable $4.00 per direct labor hour 20.00
Fixed $5.00 per direct labor hour 25.00 45.00
Standard cost per unit $115.50
Palek's January budget was based on normal volume of 40,000 standard labor hours. During
January, Palek produced 7,900 units with records indicating the following data:
Direct materials purchased 25,000 lbs. @ $3.65
Direct materials used 23,400 lbs.
Direct labor 39,900 hrs. @ $11.85
Factory overhead $375,000
Fixed factory overhead $210,000
Assuming Palek uses the four-variance method of analyzing factory overhead, compute the
following variances for the month of January and indicate whether each is favorable or
unfavorable:
a. Factory overhead spending variance
b. Factory overhead efficiency variance
c. Factory overhead budget variance
d. Factory overhead volume variance
11. Palek Company has adopted the following standards:
Input Total
Direct materials 3 lbs. @ $3.60 per lb. $10.80
Direct labor 5 hrs. @ $12.00 per hr. 60.00
Factory overhead:
Variable $4.00 per direct labor hour 20.00
Fixed $5.00 per direct labor hour 25.00 45.00
Standard cost per unit $115.50
Palek's January budget was based on normal volume of 40,000 standard labor hours. During
January, Palek produced 7,900 units with records indicating the following data:
Direct materials purchased 25,000 lbs. @ $3.65
Direct materials used 23,400 lbs.
Direct labor 39,900 hrs. @ $11.85

Factory overhead $375,000
Fixed factory overhead $210,000
Assuming Palek uses the three-variance method of analyzing factory overhead, compute the
following variances for the month of January and indicate whether each is favorable or
unfavorable:
a. Factory overhead budget variance
b. Factory overhead capacity variance
c. Factory overhead efficiency variance

Question 1
1 / 1 pts
Shrinkage of product should be treated as
Correct!
spoiled units.
defective units.
a reduction of overhead.
miscellaneous expense.
Question 2
1 / 1 pts
A unit that is rejected at a quality control inspection point, but that can be
reworked and sold, is
Correct!
defective unit
scrap unit.
spoiled unit

abnormal unit.
Question 3
1 / 1 pts
Under a backflush accounting system, the following entry is made when
products are completed:
Debit-Cost of Goods Sold Credit-Raw and In Process Credit-
Conversion Costs
Correct!
Debit-Finished Goods Credit-Raw and In Process Credit-
Conversion Costs
Debit-Finished Goods Credit-Work In Process
Debit-Cost of Goods Sold Credit-Finished Goods
Question 4
1 / 1 pts
A law firm wanting to track the costs of serving different clients may use a:
process cost system.
standard cost system

cost control system.
Correct!
job order cost system.
Question 5
1 / 1 pts
The statement of cost of goods manufactured includes:
Office supplies used in accounting office.