Biery Corporation makes a product with the following standard cost: Standard quantity or hours Standard price or rate Direct materials 1.3 liters Direct labor 0.6 hours $6.00 per liter $19.00 per hour $3.00 per hour Variable overhead 0.6 hours The company produced 4,100 units in April using 5,380 liters of direct material and 2,610 direct labor hours During the month, the company purchased 6,000 liters of the direct material at $5.80 per liter. The actual dire labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour. The company applies variable overhead on the basis of direct labor hours. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for April is: A. $2.850 F B. $2.850 U C. $2,970 F D. $2.970 U

Biery Corporation makes a product with the following standard cost: Standard quantity or hours Standard price or rate Direct materials 1.3 liters Direct labor 0.6 hours $6.00 per liter $19.00 per hour $3.00 per hour Variable overhead 0.6 hours The company produced 4,100 units in April using 5,380 liters of direct material and 2,610 direct labor hours During the month, the company purchased 6,000 liters of the direct material at $5.80 per liter. The actual dire labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour. The company applies variable overhead on the basis of direct labor hours. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for April is: A. $2.850 F B. $2.850 U C. $2,970 F D. $2.970 U

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.
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