Big Dog Company, a manufacturer of dog food, produces its product in 1,000-bag batches. The standard cost of each batch consists of 9,000 pounds of direct materials at $0.40 per pound, 48 direct labor hours at $8.50 per hour, and variable overhead cost (based on machine hours) at the rate of $10 per hour with 16 machine hours per batch. The following variable costs were incurred for the last 1,000-bag batch produced: Direct materials Direct labor Variable overhead Machine hours used 9,300 pounds costing $3,578 were purchased and used 45 hours costing $450 (a) Determine the actual and standard variable costs per bag of dog food produced, separated into direct materials, direct labor, and variable overhead. Round your answers to three decimal places. Actual Cost Standard Cost $ (930) * $ 3.6 0.45 ✓ 0.408 0.16 4.168 Direct materials Direct labor Variable overhead Total variable costs per bag $ 0.225 4.136 x $ (b) For the last 1,000-bag batch, determine the standard cost variances for direct materials, direct labor, and variable overhead. Round your answers two decimal places. Materials price variance $ $ Materials quantity variance Labor rate variance $ Labor efficiency variance $ Variable overhead spending variance $ Variable overhead efficiency variance $ (930) x F 120 ✓ U 67.5 U 25.5 ✓ F ◆ 45 ✔ U 20✔ U 4) $225 18 hours 4 46
Big Dog Company, a manufacturer of dog food, produces its product in 1,000-bag batches. The standard cost of each batch consists of 9,000 pounds of direct materials at $0.40 per pound, 48 direct labor hours at $8.50 per hour, and variable overhead cost (based on machine hours) at the rate of $10 per hour with 16 machine hours per batch. The following variable costs were incurred for the last 1,000-bag batch produced: Direct materials Direct labor Variable overhead Machine hours used 9,300 pounds costing $3,578 were purchased and used 45 hours costing $450 (a) Determine the actual and standard variable costs per bag of dog food produced, separated into direct materials, direct labor, and variable overhead. Round your answers to three decimal places. Actual Cost Standard Cost $ (930) * $ 3.6 0.45 ✓ 0.408 0.16 4.168 Direct materials Direct labor Variable overhead Total variable costs per bag $ 0.225 4.136 x $ (b) For the last 1,000-bag batch, determine the standard cost variances for direct materials, direct labor, and variable overhead. Round your answers two decimal places. Materials price variance $ $ Materials quantity variance Labor rate variance $ Labor efficiency variance $ Variable overhead spending variance $ Variable overhead efficiency variance $ (930) x F 120 ✓ U 67.5 U 25.5 ✓ F ◆ 45 ✔ U 20✔ U 4) $225 18 hours 4 46
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Determining Unit Costs, Variance Analysis, and Interpretation
Big Dog Company, a manufacturer of dog food, produces its product in 1,000-bag batches. The standard cost of each batch consists of
9,000 pounds of direct materials at $0.40 per pound, 48 direct labor hours at $8.50 per hour, and variable overhead cost (based on
machine hours) at the rate of $10 per hour with 16 machine hours per batch. The following variable costs were incurred for the last
1,000-bag batch produced:
Direct materials
Direct labor
Variable overhead
Machine hours used
9,300 pounds costing $3,578 were purchased and used
45 hours costing $450
$225
18 hours
(a) Determine the actual and standard variable costs per bag of dog food produced, separated into direct materials, direct labor, and
variable overhead.
Round your answers to three decimal places.
Actual Cost Standard Cost
$
3.6
(930) *
0.45 ✔
0.408
0.16 ✔
0.225 ✔
4.136 * $
4.168 ✔
Direct materials
Direct labor
Variable overhead
Total variable costs per bag $
$
(b) For the last 1,000-bag batch, determine the standard cost variances for direct materials, direct labor, and variable overhead.
Round your answers two decimal places.
$
$
$
Materials price variance
Materials quantity variance
Labor rate variance
Labor efficiency variance
Variable overhead spending variance $
Variable overhead efficiency variance $
$
(930) * F
120✔ U
67.5 ✔ U
25.5 ✓ F
45 ✔ U
20✔ U
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