ZZZZZZ Company Produces Soft Pillows Made from Goose Down During the Month, the Company Produced 1,000 Goose Down Pillows

Essay

ZZZZZZ Company produces soft pillows made from goose down. The company uses a standard cost system and has set the following standards for materials and labour for each pillow: $\begin{array}{lr}\text { Feathers from } 5 \text { large white geese }(5 \text { geese }(\$) \$ \text { per goose) } & \$ 25 \\\text { Fabric to make pillow cases }(3 \mathrm{~m} @ \$ 2 \text { per metre) } & \$ 6 \\\text { Direct labour }(5 \text { hours }(@) \$ 8 \text { per hour) } & \$ 40\\\text { Total prime cost }&\$71\end{array}$ During the month, the company produced 1,000 goose down pillows. Actual geese purchased were 5,100, at $4 per goose. Actual fabric purchased was 2,900 m at $2.10 per metre. There were no beginning or ending inventories of geese or fabric. Actual direct labour was 5,200 hours at $7.75 per hour.
Required:
A. Determine the total materials price variance and whether it is favourable or unfavourable.
B. Determine the total materials usage variance and whether it is favourable or unfavourable.
C. Determine the labour rate variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.
E. Make all necessary journal entries to record the purchase of materials, the issuance and usage of materials, and the direct labour variances.
F. Provide the closing entries, assuming that all variances are immaterial.