Exercise 3 (Labor and Variable Overhead Variances) Halliwell Audio, Inc., manufactures military-specification compact discs. The company uses standards to control its costs. The labor standards that have been set for one disc are as follows: Standard Hours Standard Cost P2.40 Standard Rate per Hour 24 minutes P6.00 During July, 8,500 hours of direct labor time were recorded to make 20,000 discs. The direct labor cost totaled P49,300 for the month. Required: 1. What direct labor cost should have been incurred to make the 20,000 discs? By how much does this differ from the cost that was incurred? 2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency variance. 3. The budgeted variable manufacturing overhead rate is P4 per direct labor-hour. During July, the company incurred P39,100 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month.

Exercise 3 (Labor and Variable Overhead Variances) Halliwell Audio, Inc., manufactures military-specification compact discs. The company uses standards to control its costs. The labor standards that have been set for one disc are as follows: Standard Hours Standard Cost P2.40 Standard Rate per Hour 24 minutes P6.00 During July, 8,500 hours of direct labor time were recorded to make 20,000 discs. The direct labor cost totaled P49,300 for the month. Required: 1. What direct labor cost should have been incurred to make the 20,000 discs? By how much does this differ from the cost that was incurred? 2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency variance. 3. The budgeted variable manufacturing overhead rate is P4 per direct labor-hour. During July, the company incurred P39,100 in variable manufacturing overhead cost. Compute the variable overhead spending and efficiency variances for the month.

Name: Exercise 3 (Labor and Variable Overhead Variances)Halliwell Audio, In
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Exercise 3 (Labor and Variable Overhead Variances)Halliwell Audio, Inc., manufactures military-specification compact discs.The company uses standards to control its costs. The labor standards thathave been set for one disc are as follows:Standard Ho

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Do not give answer in image
0 Required information [The following information applies to the questions displayed below] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct materials: 5 pounds at $11 per pound Direct labor: 3 hours at $12 per hour $ 55 36 Variable overhead: 3 hours at $7 per hour 21 Total standard cost per unit $ 112 The planning budget for March was based on producing and selling 21,000 units. However, during March the company actually produced and sold 26,600 units and incurred the following costs: a. Purchased 154,000 pounds of raw materials at a cost of $9.50 per pound. All of this material was used in production. b. Direct laborers worked 63,000 hours at a rate of $13 per hour. c. Total variable manufacturing overhead for the month was $510,930. 5. If Preble had purchased 178,000 pounds of materials at $9.50 per pound and used 154,000 pounds in production,…
Alpesh
[The following information applies to the questions displayed below.] Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Production runs per quarter Direct materials cost per unit Direct labor cost per unit Supervision Setup labor Incoming inspection Total overhead Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Standard 10,400 50 $ 30 50 $ 214,500 249,600 179,400 $ 643,500 a. Overhead rate b. Supervision b. Setup labor b. Incoming inspection Premium 2,600 25 $ 64 75 Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the…
Provide correct answer
Required information [The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct materials: 4 pounds at $10 per pound Direct labor: 2 hours at $16 per hour Variable overhead: 2 hours at $6 per hour $ 40 32 12 Total standard cost per unit $ 84 The planning budget for March was based on producing and selling 30,000 units. However, during March the company actually produced and sold 34,500 units and incurred the following costs: a. Purchased 150,000 pounds of raw materials at a cost of $9.20 per pound. All of this material was used in production. b. Direct laborers worked 62,000 hours at a rate of $17 per hour. c. Total variable manufacturing overhead for the month was $390,600. 11. What is the labor spending variance for March? (Indicate the effect of each variance by selecting "F" for…
Please provide solution
What is the correct answer for this question?
2