Dirickson Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor- hours. Inputs Direct materials Direct labor Variable manufacturing overhead The company has reported the following actual results for the product for July: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours Actual direct labor cost Actual variable overhead cost The labor efficiency variance for the month is closest to: Multiple Choice $1,080 F $1,176 F Standard Quantity or Hours per Unit of Output 7.6 ounces 0.10 hours 0.10 hours $1,080 U $ 541,800 Standard Price or 7,600 units 63,000 ounces Rate $9.40 per ounce $18.00 per hour $5.30 per hour $ 16,072 $ 4,592 57,750 ounces 820 hours
Dirickson Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor- hours. Inputs Direct materials Direct labor Variable manufacturing overhead The company has reported the following actual results for the product for July: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours Actual direct labor cost Actual variable overhead cost The labor efficiency variance for the month is closest to: Multiple Choice $1,080 F $1,176 F Standard Quantity or Hours per Unit of Output 7.6 ounces 0.10 hours 0.10 hours $1,080 U $ 541,800 Standard Price or 7,600 units 63,000 ounces Rate $9.40 per ounce $18.00 per hour $5.30 per hour $ 16,072 $ 4,592 57,750 ounces 820 hours
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Dirickson Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor- hours. Inputs Direct materials Direct labor Variable manufacturing overhead The company has reported the following actual results for the product for July: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours Actual direct labor cost Actual variable overhead cost The labor efficiency variance for the month is closest to: Multiple Choice $1,080 F $1,176 F Standard Quantity or Hours per Unit of Output 7.6 ounces 0.10 hours 0.10 hours $1,080 U $ 541,800 Standard Price or 7,600 units 63,000 ounces Rate $9.40 per ounce $18.00 per hour $5.30 per hour $ 16,072 $ 4,592 57,750 ounces 820 hours
Transcribed Image Text:Dirickson Incorporated has provided the following data concerning one of the products in its standard cost system Variable manufacturing overhead is applied to products on the basis of direct labor
hours
Inputs
Direct materials
Direct labor
Variable manufacturing overhead
The company has reported the following actual results for the product for July
Actual output
Raw materials purchased
Actual cost of raw materials purchased
Raw materials used in production
Actual direct labor-hours
Actual direct labor cost
Actual variable overhead cost
The labor efficiency variance for the month is closest to:
Multiple Choice
$1,080 F
$1176 F
Standard
Quantity or
Hours per Unit
of Output
7.6 ounces
$1,000 U
0.10 hours
0.10 hours
7,600 units
63,000 ounces
$ 541,800
Standard Price or
Rate
$9.40 per ounce
$ 18.00 per hour
$ 5.30 per hour
57,750 ounces
820 hours
$ 16,072
$ 4,592
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