Copland Components manufactures an electronic device for vehicle manufacturing. The current standard cost sheet for a device follows: Direct materials, ? ounces at $2.80 per ounce Direct labor, 0.4 hours at ? per hour Overhead, 0.4 hours at ? per hour Total costs Assume that the following data appeared in Copland's records at the end of the past month: Actual production Actual sales 96,000 units 90,000 units $ ? Materials costs (505,000 ounces) Materials price variance Materials efficiency variance Direct labor price variance Direct labor (37,500 hours) Overapplied overhead (total) There are no materials inventories. 63,000 U 70,000 U 18,750 F $? per device ? per device ? per device $ 30 per device 918,750 25,200 Required: a. Prepare a variance analysis for direct materials and direct labor. b. Assume that all production overhead is fixed and that the $25,200 overapplied is the only overhead variance that can be computed. What are the actual and applied overhead amounts? c. Complete the standard cost sheet for a device given below.
Copland Components manufactures an electronic device for vehicle manufacturing. The current standard cost sheet for a device follows: Direct materials, ? ounces at $2.80 per ounce Direct labor, 0.4 hours at ? per hour Overhead, 0.4 hours at ? per hour Total costs Assume that the following data appeared in Copland's records at the end of the past month: Actual production Actual sales 96,000 units 90,000 units $ ? Materials costs (505,000 ounces) Materials price variance Materials efficiency variance Direct labor price variance Direct labor (37,500 hours) Overapplied overhead (total) There are no materials inventories. 63,000 U 70,000 U 18,750 F $? per device ? per device ? per device $ 30 per device 918,750 25,200 Required: a. Prepare a variance analysis for direct materials and direct labor. b. Assume that all production overhead is fixed and that the $25,200 overapplied is the only overhead variance that can be computed. What are the actual and applied overhead amounts? c. Complete the standard cost sheet for a device given below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Copland Components manufactures an electronic device for vehicle manufacturing. The current standard cost sheet for a device
follows:
Direct materials, ? ounces at $2.80 per ounce
Direct labor, 0.4 hours at ? per hour
Overhead, 0.4 hours at ? per hour
Total costs
Assume that the following data appeared in Copland's records at the end of the past month:
Actual production
96,000 units
90,000 units
Actual sales
$?
63,000 U
70,000 U
18,750 F
Materials costs (505,000 ounces)
Materials price variance
Materials efficiency variance
Direct labor price variance
Direct labor (37,500 hours)
Overapplied overhead (total)
There are no materials inventories.
Required:
a. Prepare a variance analysis for direct materials and direct labor.
b. Assume that all production overhead is fixed and that the $25,200 overapplied is the only overhead variance that can be computed.
What are the actual and applied overhead amounts?
c. Complete the standard cost sheet for a device given below.
Required A
Complete this question by entering your answers in the tabs below.
918,750
25,200
Required B Required C
Direct Materials
Direct labor
Prepare a variance analysis for direct materials and direct labor.
Actual Price
AP x AQ
$ 1,477,000
$
$ 918,750 $
$? per device
? per device
? per device
$ 30 per device
Price Variance
63,000 U
18,750 F
Actual Inputs
at Standard Price
SP x AQ
$
$
Required A
1,414,000
937,500
$
$
Efficiency Variance
70,000 U
7,500 F
Required B
>
Flexible
Budget
SP x SQ
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