Budgeted productionActual productionMaterials:Standard price per lbStandard pounds per completed unitStandard hourly labor rateStandard hours allowed per completed unitActual labor hours workedActual total labor costsOverhead:Actual and budgeted fixed overheadStandard variable overhead rateActual pounds purchased and used in production 11,800Actual price paid for materials$23,000Labor:Actual variable overhead costsOverhead is applied on standard labor hours.The direct material price variance is:600F600U1,000 units980 units80F$2.0012$14 per hour4.54,560$62,928$27,000$3.50 per standard labor hour$15,500

Budgeted production Actual production Materials: Standard price per lb Standard pounds per completed unit 1,000 units 980 units Standard hourly labor rate Standard hours allowed per completed unit $2.00 12 Actual pounds purchased and used in production 11,800 Actual price paid for materials $23,000 Labor: $14 per hour 4.5

Budgeted production Actual production Materials: Standard price per lb Standard pounds per completed unit 1,000 units 980 units Standard hourly labor rate Standard hours allowed per completed unit $2.00 12 Actual pounds purchased and used in production 11,800 Actual price paid for materials $23,000 Labor: $14 per hour 4.5

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 20E: Calculating amount of factory overhead applied to work in process The overhead application rate for...

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Calculating amount of factory overhead applied to work in process The overhead application rate for a company is 2.50 per unit, made up of 1.00 for fixed overhead and 1.50 for variable overhead. Normal capacity is 10,000 units. In one month, there was an unfavorable flexible budget variance of 200. Actual overhead for the month was 27,000. What was the amount of the budgeted overhead for the actual level of production?
ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc. had budgeted $27,000 for fixed overhead. Actual machine hours were 5.000. Standard hours for units made were 4,800. The standard variable overhead rate was $4.10. What is the variable overhead rate variance?
Georgia Gasket Co. budgets 8,000 direct labor hours for the year. The total overhead budget is expected to amount to 20,000. The standard cost for a unit of the companys product estimates the variable overhead as follows: The actual data for the period follow: Using the four-variance method, calculate the overhead variances. (Hint: First compute the budgeted fixed overhead rate.)
Mulliner Company showed the following information for the year: Required: 1. Calculate the standard direct labor hours for actual production. 2. Calculate the applied variable overhead. 3. Calculate the total variable overhead variance.
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.
Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
Rath Company showed the following information for the year: Required: 1. Calculate the standard direct labor hours for actual production. 2. Calculate the applied variable overhead. 3. Calculate the total variable overhead variance.
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours 5.6 ounces 0.3 hours 0.3 hours Direct materials Direct labor Variable overhead The company reported the following results concerning this product in June. Originally budgeted output Actual output Raw materials used in production Purchases of raw materials Actual direct labor-hours Actual cost of raw materials purchases Actual direct labor cost Actual variable overhead cost Multiple Choice O O 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 June is: O O $6,600 F $6,600 U Standard Price or Rate $ 3.00 per ounce $ 10.00 per hour $7.00 per hour $8,800 F $8,800 U 4,000 units 4,000 units 22,000 ounces 22,700 ounces 540 hours $ 42,700 $ 14,000 $ 4,000 Standard Cos Per Unit $ 16.80 $ 3.00 $ 2.10
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Computing standard overhead allocation rates The following information relates to Morgan, Inc.’s overhead costs for the month: Morgan allocates manufacturing overhead to production based on standard direct labor hours. Compute the standard variable overhead allocation rate and the standard fixed overhead allocation rate.
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