APOLLO SPORTS MANUFACTURERS FABRIC TENTS. THE POLES ARE PURCHASED FROM A VENDOR, SO THE ONLY PART MANUFACTURED IS THE ACTUAL FABRIC TENT.
There is only one problem this week on manufacturing variance.Apollo Sports manufacturers fabric tents. The poles are purchased from a vendor, so the only part manufactured is the actual fabric tent.The company uses a standard cost system based on manufacturing 5,000 tents per month. Overhead is applied on a per-unit basis. In May,4,840 tents were produced. Management has a policy that all variances greater than 3% from standard should be investigated. Standard andactual costs are listed below:Direct materialDirect laborOverhead appliedStandard18 yards at $3.20 per yard6.5 hours at $16.00 per hour$12.00 per tentDirect materialDirect laborActual overheadActual86,550 yards at $3.25 per yard32,100 hours at $15.80 per hour$56,750Instructions:1. Compute the total, price, and quantity variances for both materials and labor.State if each variance is favorable or unfavorable.2. Compute the total, volume, and budget overhead variances. State if favorableor unfavorable.3. Prepare journal entries for the application of overhead, the actual overhead,and to record variances and close the overhead account. Note that on the actualoverhead, you will not have individual expense account amount, so just list"various" for the expense accounts.4. Always label all of your work.SOLUTION: