Amber Company produces iron table and chair sets. During October, Amber's costs were as follows:$ 3.00 per lb.$8.20 per hour$ 2.80 per lb.1,040,000 lbs.21,0001,295,000 lbs.17,0001,070,000 lbs.$6,120 FActual purchase priceActual direct labor rateStandard purchase priceStandard quantity for sets producedStandard direct labor hours allowedActual quantity purchased in OctoberActual direct labor hoursActual quantity used in OctoberDirect labor rate varianceRequired:1. Calculate the total cost of purchases for October.2. Compute the direct materials price variance based on quantity purchased.3. Calculate the direct materials quantity variance based on quantity used.4. Compute the standard direct labor rate for October.5. Compute the direct labor efficiency variance for October.

The Numerical has covred the concept of Variance Analysis.

Answered: Amber Company produces iron table and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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rpóration makes a product with the following standards for direct labor and variable overhead: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct labor 0.3 hours $ 14.00 per hour $ 5.00 per hour $ 4.20 $ 1.50 Variable overhead 0.3 hours In November the company's budgeted production was 5,300 units, but the actual production was 5,100 units. The company used 1,650 direct labor-hours to produce this output. The actual variable overhead cost was $7,590. The company applies variable overhead on the basis of direct labor-hours. The variable overhead efficiency variance for November is: Multiple Choice $552 F $600 U $552 U $600 F
The following standard costs per unit, of one product, have been taken from the records of Bahrain Company: Direct materials 4 kgs at $6 per kg Direct labor 2 hours at $20 per hour Actual data for last month: Units produced: 20,000 Direct labor hours: 44,000 Direct materials used: 70,000 kgs Direct labor rate per hour: $18 Direct material price: $8 per kg Direct materials purchased: 200,000 kgs Required: (a) Compute the price and efficiency variances for direct materials and direct labor. Direct material price variance to be calculated at the time of purchase. (b) Prepare the journal entries to record the price and efficiency variances for direct materials and direct labor.
Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.7 hours @ $12.00 per hour) Overhead (1.7 hours @ $18.50 per hour) $ 20.00 20.40 31.45 Standard cost per unit $ 71.85 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factory's capacity of 20,000 units per month. Following are the company's budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials Indirect labor Power $ 15,000 75,000 15,000 30,000 135,000 Maintenance Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs 23,000 71,000 17,000 225, 750 336, 750 $ 471,750 Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. $ 317, 200 248, 000…
Bullseye Company manufactures dartboards. Its standard cost information follows: Direct materials (cork board) Direct labor Standard Quantity 0.50 square feet 0.90 hour Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($21,750/87,000) Bullseye has the following actual results for the month of September: Number of units produced and sold Number of square feet of corkboard purchased and used Cost of corkboard used Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 0.90 hour Standard Price (Rate) $ 1.30 per square feet $5.00 per hour $0.50 per hour 74,000 43,000 $ 47,200 80,000 $ 98,000 $ 103,880 $ 33,000 Standard Unit Cost $ 0.65 4.50 0.45 0.25 Required: 1. Calculate the fixed overhead spending variance for Bullseye. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). 2. Calculate the fixed overhead volume variance…
Aileen Co manufactures two components, L and M. Both components are manufactured on the machine ZX. The following cost information per unit of L and M is available: Direct material Direct labour Variable overhead Fixed overhead Total cost L M ($) ($) 12 18 25 15 8 7 6 46 10 55 Component L requires three hours on machine ZX and component M requires five hours. Manufacturing requirements show a need for 1,500 units of each component per week. The maximum number of machine ZX hours available per week is 10,000. An external supplier has offered to supply Aileen Co with the components for a price of $57 per component L and $55 per component M. Identify, by clicking on the relevant boxes in the table below, whether each of the following statements are true or false. would be cheaper for Aileen Co to produce all the components in-house if the hours on machine ZX were available Aileen Co should purchase 400 units of component M from the external supplier TRUE TRUE FALSE FALSE
Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials P 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 P
Lucia Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (15 pounds @ $4 per pound) Direct labor (3 hours @ $14 per hour) $ 60 42 During May the company incurred the following actual costs to produce 9,000 units. Direct materials (138,000 pounds @ $3.80 per pound) Direct labor (31,500 hours @ $14.10 per hour) $ 524,400 444,150 = AR Actual Rate SR Standard Rate AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price AH Actual Hours SH Standard Hours (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Actual Cost AQ 138,000 X X AP 3.80 $ 524,400 Price variance Quantity variance…
Lucia Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (15 pounds @ $3 per pound) $45 Direct labor (3 hours @ $14 per hour) 42 During May the company incurred the following actual costs to produce 8,600 units. Direct materials (131,700 pounds @ $2.80 per pound) $368,760 Direct labor (29,200 hours @ $14.10 per hour) 411,720 AR = Actual RateSR = Standard RateAQ = Actual QuantitySQ = Standard QuantityAP = Actual PriceSP = Standard Price(1) Compute the direct materials price and quantity variances.(2) Compute the direct labor rate variance and the direct labor efficiency variance.
Camila Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (14 pounds @ $5 per pound) $ 70 Direct labor (2 hours @ $14 per hour) 28 During June the company incurred the following actual costs to produce 8,800 units. Direct materials (125,300 pounds @ $4.75 per pound) $ 595,175 Direct labor (22,300 hours @ $14.15 per hour) 315,545 AR = Actual RateSR = Standard RateAQ = Actual QuantitySQ = Standard QuantityAP = Actual PriceSP = Standard Price(1) Compute the direct materials price and quantity variances.(2) Compute the direct labor rate variance and the direct labor efficiency variance.
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below. Direct materials Direct labor Standard Quantity or Hours 7.80 pounds 0.30 hours Standard Price or Rate $ 2.30 per pound $ 8.00 per hour During the most recent month, the following activity was recorded: a. 25,900.00 pounds of material were purchased at a cost of $2.10 per pound b. All of the material purchased was used to produce 3,000 units of Zoom c. 700 hours of direct labor time were recorded at a total labor cost of $6,300 Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month 1. Materials price variance 1. Materials quantity variance 2 Labor rate variance 2 Labor efficiency variance Standard Cast $17.94 $2.40 Note: For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for…
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