Emerald Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static budget for 2017: Expected production and sales Expected selling price per unit 7,000 units 680 $1,400,000 Total fixed costs Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manu- facturing labor: Standard Quantity 10 pounds Standard Price Standard Unit Cost $ 8 per pound $50 per hour $ 80 Direct materials Direct manufacturing labor $185 3.7 hours During 2017, actual number of units produced and sold was 4,800, at an average selling price of $720. Ac- tual cost of direct materials used was $392,700, based on 66,000 pounds purchased at $5.95 per pound. Direct manufacturing labor-hours actually used were 18,300, at the rate of $48 per hour. As a result, actual direct manufacturing labor costs were $878,400. Actual fixed costs were $1,170,000. There were no beginning or ending inventories.

Emerald Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static budget for 2017: Expected production and sales Expected selling price per unit 7,000 units 680 $1,400,000 Total fixed costs Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manu- facturing labor: Standard Quantity 10 pounds Standard Price Standard Unit Cost $ 8 per pound $50 per hour $ 80 Direct materials Direct manufacturing labor $185 3.7 hours During 2017, actual number of units produced and sold was 4,800, at an average selling price of $720. Ac- tual cost of direct materials used was $392,700, based on 66,000 pounds purchased at $5.95 per pound. Direct manufacturing labor-hours actually used were 18,300, at the rate of $48 per hour. As a result, actual direct manufacturing labor costs were $878,400. Actual fixed costs were $1,170,000. There were no beginning or ending inventories.

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Description: Q.Compute price and efficiency variances for direct materials and direct manufacturing labor. Emerald Statuarymanufactures bust statues of famous historical figures. All statues are the same size. Each unit requires thesame amount of resources. The f

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

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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Question

Q.Compute price and efficiency variances for direct materials and direct manufacturing labor.

Emerald Statuary
manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the
same amount of resources. The following information is from the static budget for 2017:
Expected production and sales
Expected selling price per unit
7,000 units
680
$1,400,000
Total fixed costs
Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manu-
facturing labor:
Standard Quantity
10 pounds
Standard Price
Standard Unit Cost
$ 8 per pound
$50 per hour
$ 80
Direct materials
Direct manufacturing labor
$185
3.7 hours
During 2017, actual number of units produced and sold was 4,800, at an average selling price of $720. Ac-
tual cost of direct materials used was $392,700, based on 66,000 pounds purchased at $5.95 per pound. Direct
manufacturing labor-hours actually used were 18,300, at the rate of $48 per hour. As a result, actual direct
manufacturing labor costs were $878,400. Actual fixed costs were $1,170,000. There were no beginning or
ending inventories.

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