What is the direct materials price variance? AeroLux Interiors manufactures premium seatcomponents for private aircraft that require skilledlabor and custom materials. AeroLux uses standardcosts to prepare its flexible budget. For the secondquarter of 2022, direct material and direct laborstandards for one of their popular items were as follows:Materials: 2.0 pounds per unit at $5.50 per poundLabor: 1.5 hours per unit at $20.00 per hourDuring the second quarter, AeroLux produced 4,200units of this product. At the end of the quarter, materialsrecords showed the company used 8,700 pounds ofmaterial and incurred total material costs of $48,840.What is the direct materials price variance?

Step 1: DefinitionsConcept of Direct Materials Price Variance:Direct Materials Price Variance is the…

Answered: AeroLux Interiors manufactures premium…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 5EB: Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and...

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Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at $1.30 per ounce) $4.55 Labor (0.30 hour at $12.00 per hour) 3.60 Overhead 2.40 Total $10.55 At the start of 2021, Scotch Brand planned to produce 80,000 cases of tape during the year. Overhead is allocated based on the number of cases of tape produced. Annual fixed overhead is budgeted at $64,000 and the variable overhead costs are budgeted at $1.60 per case. The following information summarizes the results for 2021: Actual production, 81,000 cases Purchased 275,000 ounces of material at a total cost of $343,750 Used 266,250 ounces of material in production Employees worked 22,000 hours, total labor cost $275,000 Actual overhead incurred,…
Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at $1.30 per ounce) $4.55 Labor (0.30 hour at $12.00 per hour) 3.60 Overhead 2.70 Total $10.85 At the start of 2021, Scotch Brand planned to produce 20,000 cases of tape during the year. Overhead is allocated based on the number of cases of tape produced. Annual fixed overhead is budgeted at $18,000 and the variable overhead costs are budgeted at $1.80 per case. The following information summarizes the results for 2021: Actual production, 21,000 cases Purchased 275,000 ounces of material at a total cost of $343,750 Used 266,250 ounces of material in production Employees worked 22,000 hours, total labor cost $275,000 Actual overhead incurred,…
Radiance Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 2020, each suit is budgeted to take 3 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $12. The budgeted number of suits to be manufactured in June 2020 is 1,080. Actual variable manufacturing overhead costs in June 2020 were $51,520 for 1,040 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were 4,480. equirement 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead. Begin by…
Skulas, Inc., manufactures and sells Skulas manufactures a single model, the Pipex. In late 2017, Skulas's management accountant gathered the following data to prepare budgets for January 2018: Data Table Materials and Labor Requirements Direct materials Wood 9 board feet (b.f.) per snowboard Fiberglass 7 yards per snowboard Direct manufacturing labor 8 hours per snowboard Skulas's CEO expects to sell 1 comma 300 snowboards during January 2018 at an estimated retail price of $ 650 per board.Further, the CEO expects 2018 beginning inventory of 600 snowboards and would like to end January 2018 with 600 snowboards in stock. Direct Materials Inventories Beginning Inventory 1/1/2018 Ending Inventory 1/31/2018 Wood 2,020 b.f. 1,520 b.f. Fiberglass 1,020 yards 2,020 yards Variable manufacturing overhead is $ 8 per direct manufacturinglabor-hour. There are also $ 20 comma 800 in fixed manufacturing…
Radical Boards, Inc. manufactures and sells a single model of snowboard, the Vortex. In the summer of 2022, Iggy Sawdust, CPA, provided data for the 2022 budget: Direct Material Requirements (per snowboard) Wood Fiberglass Direct Labor Requirements Expected sales during 2022 - 1000 units at $450 per unit Expected inventory balances: Finished Goods Wood Raw Material Fiberglass Raw Material Other data: Wood Fiberglass Direct labor Variable Overhead Fixed Overhead Overhead Driver Variable marketing costs Expected sales visits in 2022 Fixed non-overhead costs 5 board feet (b.f.) 6 yards 5 hours 1/1/2022 100 2000 b.f. 1000 yards 12/31/2022 200 1500 b.f. 2000 yards Unit Prices $30.00 per b.f. $5.00 per yard $25.00 per hour $7.00 per dih $66,000 DL Hours $250 per sales visits 30 $30,000 The unit cost for ending FG inventory at 12/31/21 was $374.80. Ignore Work In Process The December 2022 Budget Includes the following selected balances: Cash Property, Plant, and Equipment Current Liabilities…
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Parsons Company is planning to produce 1,900 units of product in 2020. Each unit requires 2.20 pounds of materials at $6.80 per pound and a half-hour of labor at $14.00 per hour. The overhead rate is 40% of direct labor. (a) Compute the budgeted amounts for 2020 for direct materials to be used, direct labor, and applied overhead. Direct materials $ Direct labor Overhead (b) Standard cost $ Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.) $ $
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Case Study for Slopes Company.Comprehensive operating budget. Slopes, Inc., manufactures and sells snowboards. Slopesmanufactures a single model, the Pipex. In the summer of 2018, Slope’s accountant gatheredthe following data to prepare budgets for 2019:Materials and labor requirementsDirect materials:Wood 5 board feet per snowboardFiberglass 6 yards per snowboardDirect manufacturing labor 5 hours per snowboardSlopes’ CEO expects to sell 1,000 snow boards during 2019 at an estimated retail price ofRM 450 per board. Further, he expects 2019 beginning inventory of 100 boards, and would liketo end 2019 with 200 snowboards in stock.Direct materials inventoriesBeginning Inventory Ending Inventory1/1/2019 12/31/2019________________________________________________________Wood 2,000 1,500Fiberglass 1,000 2,000Variable manufacturing overhead is allocated is allocated at the rate RM 7 per directmanufacturing labor-hour. There are also RM 66,000 in fixed manufacturing overhead costsbudgeted for…
Using account analysis, Pymble Co. wishes to estimate employees' automobile expenses as a function of miles driven. Costs for the past quarter, during which 58,000 miles were driven, are classified as follows: Item Classification Cost $3,200 11,200 3,900 1,800 2,100 Fuel Variable Fixed Fixed Variable Fixed Depreciation Insurance Maintenance Parking Predict the total cost for the coming quarter for which the employees' auto travel budget would be 65,000 miles: $
LIME Corporation developed standard costs for direct material and direct labor. In 2020, LIME estimated the following standard costs for one of their most well loved products, the LIME classic Mother's Pear Pie which had a brown sugar coating on top. Budgeted quantity Budgeted price Direct materials 2.0 pounds $6.25 per pound Direct labor 0.20 hours $13.00 per hour During September, LIME produced and sold 1,100 pies using 2,300 pounds of direct materials at an average cost per pound of $6.00 and 200 direct labor hours at an average wage of $13.25 per hour. The direct material price variance during September is O $575 favorable O $575 unfavorable O $50.00 unfavorable O$50.00 favorable

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