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Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows: standard Hours 12 minutes (0.20 hours) Standard Rate per Hour $11.00 standard Cost $2.20 During July, 2,350 hours of direct labour time were recorded to make 11,000 units. The direct labour cost totalled $25,145 for the month. Required: 1-a. What direct labour cost should have been incurred to make the 11,000 speakers? (Do not round Intermediate calculations.)

Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows: standard Hours 12 minutes (0.20 hours) Standard Rate per Hour $11.00 standard Cost $2.20 During July, 2,350 hours of direct labour time were recorded to make 11,000 units. The direct labour cost totalled $25,145 for the month. Required: 1-a. What direct labour cost should have been incurred to make the 11,000 speakers? (Do not round Intermediate calculations.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows: standard Hours 12 minutes (0.20 hours) During July, 2,350 hours of direct labour time were recorded to make 11,000 units. The direct labour cost totalled $25,145 for the month. Direct labour cost Required: 1-a. What direct labour cost should have been incurred to make the 11,000 speakers? (Do not round Intermediate calculations.) Total variance S S Standard Rate per Hour $11.00 1-b. By how much does direct labour cost differ from the cost that was incurred? (Indicate the effect of varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) standard Cost $2.20 Labour rate variance Labour efficiency variance 2. Break down the difference in cost from requirement 1-b above into a labour rate variance and a labour efficiency variance. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero variance).) S S
Transcribed Image Text:Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows: standard Hours 12 minutes (0.20 hours) During July, 2,350 hours of direct labour time were recorded to make 11,000 units. The direct labour cost totalled $25,145 for the month. Direct labour cost Required: 1-a. What direct labour cost should have been incurred to make the 11,000 speakers? (Do not round Intermediate calculations.) Total variance S S Standard Rate per Hour $11.00 1-b. By how much does direct labour cost differ from the cost that was incurred? (Indicate the effect of varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) standard Cost $2.20 Labour rate variance Labour efficiency variance 2. Break down the difference in cost from requirement 1-b above into a labour rate variance and a labour efficiency variance. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero variance).) S S
3. The budgeted variable manufacturing overhead rate is $2.00 per direct labour-hour. During July, the company incurred $4,935 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Answer is not complete. Variable overhead spending variance Variable overhead efficiency variance
Transcribed Image Text:3. The budgeted variable manufacturing overhead rate is $2.00 per direct labour-hour. During July, the company incurred $4,935 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month. (Indicate the effect of each varlance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Answer is not complete. Variable overhead spending variance Variable overhead efficiency variance
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