Camping Supply Company has developed a new camping lamp that runs on solar power. The solar cells charge in the sun all day and then the lamp is ready to run when the sun goes down. The company has a standard costing system to help control costs and has established the following standards related to the new camping lamp: 1. Direct materials: 2 small solar cells per lamp at $0.50 per cell 2. Direct labour: 0.50 hours per lamp at $15 per hour During March, the company produced 4,000 camping lights. Production data for March are as follows: 1. Direct materials: 12,000 small solar cells were purchased at a cost of $0.45 per cell; 5,500 of these were still in inventory at the end of the month (there was no opening inventory). 2. Direct labour: 1,600 direct labour-hours were worked at a cost of $25,600. Required: 1. Compute the following variances for March: a. Direct materials price and quantity variances. b.Direct labour rate and efficiency variances. 2. Prepare a brief explanation of the possible causes of each variance.

Camping Supply Company has developed a new camping lamp that runs on solar power. The solar cells charge in the sun all day and then the lamp is ready to run when the sun goes down. The company has a standard costing system to help control costs and has established the following standards related to the new camping lamp: 1. Direct materials: 2 small solar cells per lamp at $0.50 per cell 2. Direct labour: 0.50 hours per lamp at $15 per hour During March, the company produced 4,000 camping lights. Production data for March are as follows: 1. Direct materials: 12,000 small solar cells were purchased at a cost of $0.45 per cell; 5,500 of these were still in inventory at the end of the month (there was no opening inventory). 2. Direct labour: 1,600 direct labour-hours were worked at a cost of $25,600. Required: 1. Compute the following variances for March: a. Direct materials price and quantity variances. b.Direct labour rate and efficiency variances. 2. Prepare a brief explanation of the possible causes of each variance.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 4EA: Use the information provided to create a standard cost card for production of one glove box switch....

See similar textbooks

Related questions

Q: I keep getting this question wrong and trying to see how to work it

A: Production costs are such cost of a company which the company must be incurred for the manufacturing…

Q: Setup costs for Weird Al’s two different accordion products: The Polka, and The Super amounted to…

A: Setup costs are charged to both products under Activity Based Costing = $9000/2…

Q: Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily…

A: Contribution means the difference between the selling price and variable cost . Fixed cost remain…

Q: Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans…

Q: Wood Creations designs, manufactures, and sells modern wood sculptures. Sally Jensen is an artist…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as…

A: Start by copying the "actual results" from the given data.Next, let's go to the "Flexible budget"…

Q: SportsHaven’s garden department produces bags of mulch. Fixed cost is $17,300. Each bag sells for…

A: Step 1: Introduction to CVP AnalysisCVP analysis, or cost-volume-profit analysis, is a management…

Q: Cherry Blossom Products Inc. produces and sells yoga-training products: how-to DVDs and a basic…

A: As per the given information: Sales:DVDs - 13,500Equipment sets- 4,500Yoga Mats - 9,000 DVDs…

Q: Light Up Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The…

A: Total Manufacturing Overhead Costs=Variable Manufacturing Overhead Costs+Fixed Manufacturing…

Q: Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as…

A: Flexible Budget is the preparation of the budget using standard costs and revenues with the actual…

Q: Use the information provided to calculate standard costs: To make one switch it takes 17 feet of…

A: Introduction:- Standard costs are estimates of the actual costs in a company’s production process…

Q: JPAK manufactures and sells mountain bikes. It operates eight hours a day, five days a week. Using…

A: Fixed cost is a cost which remains fixed irrespective of change in activity. Variable cost is the…

Q: Coram Audio makes wireless headphones. Each pair of headphones comes with a travel case. Since its…

A: A "make or buy" decision, also known as "insourcing vs. outsourcing," is a critical business…

Q: 0 Required information [The following information applies to the questions displayed below.) Morning…

A: Variable costs are those costs that vary with production levels.Fixed costs are those costs that…

Q: Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a…

A: This question is related to the Make and Buy Decision, in which the cost manager compares the making…

Q: Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as…

A: Flexible budget performance report is the one which is prepared in order to estimate the costs. It…

Q: Sylvan Creations designs, manufactures, and sells modern wood sculptures. Sandra Johnson is an…

Q: Required information [The following information applies to the questions displayed below.] Morning…

A: Variable cost :— It is the cost that changes with change in activity of cost driver. Variable cost…

Q: SixthZ currently produces and sells 1,200 treehouses per year and sells them at $1200 per treehouse.…

A: Introduction: After deducting the expenses and the cost of sales from income, operating income is…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Camping Supply Company has developed a new camping lamp that runs on solar power. The solar cells
charge in the sun all day and then the lamp is ready to run when the sun goes down. The company has a
standard costing system to help control costs and has established the following standards related to the new
camping lamp:
1. Direct materials: 2 small solar cells per lamp at $0.50 per cell
2. Direct labour: 0.50 hours per lamp at $15 per hour
During March, the company produced 4,000 camping lights. Production data for March are as follows:
1. Direct materials: 12,000 small solar cells were purchased at a cost of $0.45 per cell; 5,500 of these were
still in inventory at the end of the month (there was no opening inventory).
2. Direct labour: 1,600 direct labour-hours were worked at a cost of $25,600.
Required:
1. Compute the following variances for March:
a. Direct materials price and quantity variances.
b.Direct labour rate and efficiency variances.
2. Prepare a brief explanation of the possible causes of each variance.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:

VIEW

Step 2: Calculations:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Aapesh
Use the information provided to create a standard cost card for production of one glove box switch. To make one switch it takes 16 feet of plastic-coated copper wire and 0.5 pounds of plastic material. The plastic material can usually be purchased for $20.00 per pound, and the wire costs $2.50 per foot. The labor necessary to assemble a switch consists of two types. The first type of labor is assembly, which takes 3.5 hours. These workers are paid $27.00 per hour. The second type of labor is finishing, which takes 2 hours. These workers are paid $29.00 per hour. Overhead is applied using labor hours. The variable overhead rate is $14.90 per labor hour. The fixed overhead rate is $15.60 per hour.
Use the following information to create a standard cost card for production of one photography drone from Drone Experts. To make one drone it takes 2 pounds of plastic material. The material can usually be purchased for $25.00 per pound. The labor necessary to build a drone consists of two types. The first type of labor is assembly, which takes 10.5 hours. These workers are paid $21.00 per hour. The second type of labor is finishing, which takes 7 hours. These workers are paid $25.00 per hour. Overhead is applied using labor hours. The variable overhead rate is $14.00 per labor hour. The fixed overhead rate is $16.00 per hour.
Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?
Rahul
Suzy's Cool Treatz is a snow cone stand near the local park. To plan for the future, the owner wants to determine her cost behavior patterns. She has the following information available about her operating costs and the number of snow cones served. Month Number of snow Total operating cones Costs 3,500 $5,000 January February $4,800 3,800 March 5,000 $6,800 April 3,600 $5,450 4,700 $6,200 May $5,950 4,250 June Suzy uses the high-low method to determine her operating cost equation. What are her estimated costs at 4,933 snow cones? When calculating the variable cost per unit, round your answer to two decimal places before completing your calculations. Do not use dollar signs, commas or decimals in your answer. Input your answer to the nearest whole number
The estimated cost to make a meter of fabric is.
Vitamin-Sea is a company that specializes in making tents for beach tourism. Vitamin-Sea wants all of its customers to feel comfortable when traveling to the beach. The company aims to sell 3,000 units of tents at a selling price of $ 50 in July. They certainly have employees and also direct labor who help the production, with the formula for calculating salaries and wages is $ 2,000 for fixed costs and $ 20 for variable costs. For tent-making materials, parachutes are used for $ 3 and maintenance equipment is $ 5 per unit. In addition to Utilities for $ 1,500 for July, Factory and Office Rent for $ 10,000, Equipment Depreciation for $ 20,000 and insurance for $ 1,500. All variable cost are counted based on unit produce and sold. At the end of July, here are the actual results obtained by Vitamin-Sea: | Actual Result Quantity produced and sold 3,500 200,000 Revenue Expenses |Wages and Salaries Direct Material Equipment maintenance Utilities Factory and Office Rent Equipment…
Tasty Treats is a snow cone stand near the local park. To plan for the future, it wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served Month January February March. April May June Number of snow cones 6,400 7,000 6,200 6,900 7,600 7,250 Total operating costs $5,830 $6,400 $5,840 $6,330 $6,820 $6,575 Using the high-low method, the monthly operating costs, if Tasty Treats sells 8,000 snow cones in a month, are:
Wood Creations designs, manufactures, and sells modern wood sculptures. Sally Jensen is an artist for the company. Jensen has spent much of the past month working on the design of an intricate abstract piece. Jim Smoot, product development manager, likes the design. However, he wants to make sure that the sculpture can be priced competitively. Alexis Nampa, Wood's cost accountant, presents Smoot with the following cost data for the expected production of 75 sculptures: $ 8,000 30,000 37,000 33,000 25,000 15,000 Design cost Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Marketing Required: 1. Smoot thinks that Wood Creations can successfully market each piece for $2,400. The company's target operating income is 20% of revenue. a.) Wood Creations has a total capital investment of $240,000. Compute the target percentage of return on investment. b.) Calculate the markup percentage on full cost based on the current cost data. c.)…
Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for $6.00 each. The company normally sells its shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials. Direct labor Variable factory overhead $2.00 0.50 1.50 2.50 $6.50 Fixed factory overhead Total cost per unit Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College Differential revenue from accepting offer Differential variable costs of additional units Differential income (loss) from accepting the offer The order should be $
Make or Buy Filtration, Inc. manufactures filters for use in secondary water irrigation systems. The costs per unit, for 20,000 filters, are as follows. Direct materials $6.00 Direct labor 7.00 Variable overhead 1.00 Fixed overhead 2.00 Total costs $16.00 Irrigation Products has offered to sell 20,000 filters to Filtration for $16 per filter. If Filtration accepts Irrigation Products’ offer, the facilities used to manufacture filters could be used to produce refrigerator filtration units. Revenues from the sale of refrigerator filtration units are estimated at $54,000, with variable costs amounting to 50% of sales. In addition, $1 per unit of the fixed overhead associated with the manufacture of secondary water irrigation filters could be eliminated. Compute the following: Cost to make filters Answer Cost to buy filters Answer Should Filtration, Inc. accept Irrigation Product’s offer? Yes, the cost to purchase the filters is less than the cost to…