Exercise 21-15 Direct materials and direct labor variances P3The following information relates to production activities of Mercer Manufacturing for the year.Actual direct materials usedActual direct labor usedActual units producedStandard quantity and price per unit for direct materialsStandard quantity and rate per unit for direct labor16,000 lbs. at $4.05 per lb.16,635 hours at $19 per hour30,0000.5 lb. at $4.00 per lb.0.5 hour at $20 per hour1. Compute the direct materials price and quantity variances and identify each as favorable or unfavorable.2. Compute the direct labor rate and efficiency variances and identify each as favorable or unfavorable.

1. DM Price Variance = (4.05 − 4.00) × 16,000lbs= 0.05 × 16,000lbs= 800 U (actual price per lb is…

Answered: Exercise 21-15 Direct materials and…

FINANCIAL ACCOUNTING

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Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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19
Question 40
Exercise 9.14 Direct Materials and Direct Labor Variances OBJECTIVE 3 Zoller Company produces a dark chocolate candy bar. Recently, the company adopted the fol- lowing standards for one bar of the candy: Direct materials (6.3 oz. @ $0.20) Direct labor (0.08 hr. @ $18.00) Standard prime cost $1.26 1.44 $2.70 During the first week of operation, the company experienced the following actual results: Bars produced: 143,000. b. Ounces of direct materials purchased: 901,200 ounces at $0.21 per ounce. c. There are no beginning or ending inventories of direct materials. d. Direct labor: 11,300 hours at $17.30. а. Required: 1. Compute price and usage variances for direct materials. 2. Compute the rate variance and the efficiency variance for direct labor. 3. Prepare the journal entries associated with direct materials and direct labor.
E 8-17 Calculating factory overhead: two variances Munoz Manufacturing Co. normally produces 10,000 units of product X each month. Each unit requires 2 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are $2.50 and $1.50 per direct labor hour, respectively. Cost and production data for May follow: Production for the month. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9,000 units Direct labor hours used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18,500 hours Factory overhead incurred for: Variable costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$28,500 Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,000 a. Calculate the flexible-budget variance. b. Calculate the production-volume variance. c. Was the total factory overhead under- or overapplied? By what amount? Use this…
s
Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 Skip to question [The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product. Direct materials (6 Ibs. @ $5 per Ib.) $ 30 Direct labor (2 hrs. @ $17 per hr.) 34 Overhead (2 hrs. @ $18.50 per hr.) 37 Total standard cost $ 101 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 45,000 Indirect labor 180,000 Power 45,000 Repairs and maintenance 90,000 Total variable overhead costs $ 360,000 Fixed…
Exercise 19-7 (Algo) Income reporting under absorption costing and variable costing LO P2 Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials $ 40 per unit Direct labor $ 60 per unit Variable overhead $ 40 per unit Fixed overhead $ 6,300,000 per year Variable selling and administrative expenses $ 11 per unit Fixed selling and administrative expenses $ 5,000,000 per year Units produced 105,000 units Units sold 75,000 units Sales price $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.
Actual Results $ 185,100 53,000 pounds @ $7.20 per pound 14,700 hours @ $16.60 per hour 7,500 units A manufactured product has the following information for June. Direct materials Direct labor Overhead Units manufactured Standard Quantity and Cost 7 pounds @ $7 per pound 2 DLH @ $16 per DLH 2 DLH @ $12 per DLH Standard Cost Compute the (1) direct materials price variance and (2) direct materials quantity variance. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Cost per unit" answers to 2 decimal places.) AQ = Actual Quantity SQ = Standard Quantity AP Actual Price SP=Standard Price Actual Cost 6A $ 0 69 0
Exercise 21-7 (Algo) Standard cost per unit, total budgeted cost, and total cost variance LO P2 A manufactured product has the following information for August. Direct materials Direct labor Overhead Units manufactured Total manufacturing costs Standard Quantity and Cost 2 pounds per unit @ $4.00 per pound 0.5 hour per unit @ $28 per DLH $30 per DLH Actual Results 12,600 units $ 460,400 (1) Prepare the standard cost card showing standard cost per unit. (2) Compute total budgeted cost for production in August. (3) Compute the total cost variance for August. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the standard cost card showing standard cost per unit. (Round your final answers to 2 decimal places.) Inputs Direct materials Standard quantity or hours pounds x Standard price or rate Standard cost per unit Direct labor Overhead DLH × DLH ×
BI Total Labor Variance Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.02 hours. During the month of April, 470,000 bottles were produced using 14,000 labor hours $10.50. The standard wage rate is $7.50 per hour. Required: Calculate the total variance for production labor for the month of April. Enter amounts as positive numbers. If required, round your answer to the nearest cent. Unfavorable
Exercise 21-19 (Algo) Overhead controllable and volume variances LO P4 Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 3.75 DLH per unit. For March, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following budget. The company actually operated at 90% capacity (9,000 units) in March and incurred actual total overhead costs of $151,410. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 80% Operating Levels 8,000 $ 66,000 $ 81,000 1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 30,000 DLH, computed as 8,000 units × 3.75 DLH per unit. 2. Compute the total overhead variance. 3. Compute the overhead controllable variance. 4. Compute the overhead volume variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the standard…

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