Seven Enterprises is a large producer of gourmet pet food. During April, it prod

Question

Seven Enterprises is a large producer of gourmet pet food. During April, it produced 147 batches of puppy meal. Each batch weighs 1,000 pounds. To produce this quantity of output, the company purchased and used 148,450 pounds of direct materials at a cost of $593,800. IT ALSO INCURRED DIRECT LABOR COST OF $17, 600 for the 2,200 hours worked by employees on the puppy meal crew. Manufacturing overhead incurred at the puppy meal plant during April totaled $3,625, of which $2,450 was considered fixed. Seven

Explanation / Answer

Hi, Please find the answers as below: Part A: VOH Spending Variance = 1,175 - (9 x 140) = 85 (Favorable) VOH Volume Variance =(9 x 140) - (9 x 147) = 63 (Favorable) FOH Spending Variance = 2,450 - (20 x 140) = 350 (Favorable) FOH Volume Variance = (20 x 140) - (20 x 147) = 140 (Favorable) Part B: Work In Process Inventory Dr 4,263 VOH Spending Variance (Favorable) Cr 85 VOH Efficiency Variance (Favorable) Cr 63 FOH Spending Variance (Favorable) Cr 350 FOH Efficiency Variance (Favorable) Cr 140 Manufacturing Overhead Cr 3,625 Part C: Finished Goods Inventory Dr 6,39,156 Work In Process Inventory Cr 6,39,156 Part D: Materials Price Variance (Favorable) Dr 29,690 Labor Rate Variance (Favorable) Dr 1,100 VOH Spending Variance (Favorable) Dr 85 VOH Efficiency Variance (Favorable) Dr 63 FOH Spending Variance (Favorable) Dr 350 FOH Efficiency Variance (Favorable) Dr 140 Materials Quantity Variance (Unfavorable) Cr 6,090 Labor Efficiency Variance (Unfavorable) Cr 1,207 Cost of Goods Sold Cr 24,131 Thanks, Aman

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