Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Quantity Standard Price (Rate) Standard Unit Cost Direct materials (clay) 1.80 lbs. $ 1.90 per lb. $ 3.42 Direct labor 1.80 hrs. $ 16.00 per hr. 28.80 Variable manufacturing overhead (based on direct labor hours) 1.80 hrs. $ 1.10 per hr. 1.98 Fixed manufacturing overhead ($487,500.00 ÷ 195,000.00 units) 2.50 Barley Hopp had the following actual results last year: Number of units produced and sold 200,000 Number of pounds of clay used 368,200 Cost of clay $ 736,400 Number of labor hours worked 245,000 Direct labor cost $ 5,806,500 Variable overhead cost $ 390,000 Fixed overhead cost $ 470,000 Required: 1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. 2. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp. 3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its
| Standard Quantity | Standard Price (Rate) | Standard Unit Cost | |||||
| Direct materials (clay) | 1.80 | lbs. | $ | 1.90 | per lb. | $ | 3.42 |
| Direct labor | 1.80 | hrs. | $ | 16.00 | per hr. | 28.80 | |
| Variable manufacturing |
1.80 | hrs. | $ | 1.10 | per hr. | 1.98 | |
| Fixed manufacturing overhead ($487,500.00 ÷ 195,000.00 units) | 2.50 | ||||||
Barley Hopp had the following actual results last year:
| Number of units produced and sold | 200,000 | |
| Number of pounds of clay used | 368,200 | |
| Cost of clay | $ | 736,400 |
| Number of labor hours worked | 245,000 | |
| Direct labor cost | $ | 5,806,500 |
| Variable overhead cost | $ | 390,000 |
| Fixed overhead cost | $ | 470,000 |
Required:
1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp.
2. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp.
3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.
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