Fortes Inc. 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. Standard Quantity or Hours per Unit of Output 6.9 ounces Inputs Direct materials Direct labor Variable manufacturing overhead Standard Price or Rate $ 7.50 per ounce $28.70 per hour $ 5.80 per hour 0.5 hours 0.5 hours The company has reported the following actual results for the product for April: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours 8,800 units 62,000 ounces $355,530 60,740 ounces 3,290 hours $100,060 $ 18,250 Actual direct labor cost Actual variable overhead cost Required: a. Compute the materials price variance for April. b. Compute the materials quantity variance for April. c. Compute the labor rate variance for April. d. Compute the labor efficiency variance for April. e. Compute the variable overhead rate variance for April. f. Compute the variable overhead efficiency variance for April. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Fortes Inc. 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. Standard Quantity or Hours per Unit of Output 6.9 ounces Inputs Direct materials Direct labor Variable manufacturing overhead Standard Price or Rate $ 7.50 per ounce $28.70 per hour $ 5.80 per hour 0.5 hours 0.5 hours The company has reported the following actual results for the product for April: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours 8,800 units 62,000 ounces $355,530 60,740 ounces 3,290 hours $100,060 $ 18,250 Actual direct labor cost Actual variable overhead cost Required: a. Compute the materials price variance for April. b. Compute the materials quantity variance for April. c. Compute the labor rate variance for April. d. Compute the labor efficiency variance for April. e. Compute the variable overhead rate variance for April. f. Compute the variable overhead efficiency variance for April. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Fortes Inc. 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.
Standard Quantity or
Hours per Unit of
Output
Standard Price or Rate
Inputs
Direct materials
6.9 ounces
$ 7.50 per ounce
$28.70 per hour
$ 5.80 per hour
Direct labor
0.5 hours
Variable manufacturing overhead
0.5 hours
The company has reported the following actual results for the product for April:
Actual output
Raw materials purchased
Actual cost of raw materials purchased
Raw materials used in production
8,800 units
62,000 ounces
$355,530
60,740 ounces
3,290 hours
$100,060
$ 18,250
Actual direct labor-hours
Actual direct labor cost
Actual variable overhead cost
Required:
a. Compute the materials price variance for April.
b. Compute the materials quantity variance for April.
c. Compute the labor rate variance for April.
d. Compute the labor efficiency variance for April.
e. Compute the variable overhead rate variance for April.
f. Compute the variable overhead efficiency variance for April.
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Input all amounts as positive values.)
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