Great Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 141,000 square feet of extruded vinyl purchased at $1.40 per square foot. Production required 420 direct labor hours that cost $12.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.45 per square foot. The labor standard was 0.023 direct labor hour per fender, at a standard cost of $11.50 per hour. Read the requiremen). Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Variance Direct materials cost variance Direct labor cost variance Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) = Formula Direct materials efficiency variance Direct labor efficiency variance Does the pattern of variances suggest Great Fender's managers have been making trade-offs? Explain. = The The net effect on the total direct materials variance is Formula direct materials cost variance combined with the ▼ direct labor cost variance combined with the performed more efficiently. The net effect on the total direct labor variance is Variance = ✓direct materials efficiency variance suggests that managers may have used direct labor efficiency variance suggests that managers may have used direct materials. The workers who
Great Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 141,000 square feet of extruded vinyl purchased at $1.40 per square foot. Production required 420 direct labor hours that cost $12.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.45 per square foot. The labor standard was 0.023 direct labor hour per fender, at a standard cost of $11.50 per hour. Read the requiremen). Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Variance Direct materials cost variance Direct labor cost variance Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) = Formula Direct materials efficiency variance Direct labor efficiency variance Does the pattern of variances suggest Great Fender's managers have been making trade-offs? Explain. = The The net effect on the total direct materials variance is Formula direct materials cost variance combined with the ▼ direct labor cost variance combined with the performed more efficiently. The net effect on the total direct labor variance is Variance = ✓direct materials efficiency variance suggests that managers may have used direct labor efficiency variance suggests that managers may have used direct materials. The workers who
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Great Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 141,000 square feet of extruded vinyl purchased at $1.40 per square foot. Production
required 420 direct labor hours that cost $12.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.45 per square foot. The labor standard was
0.023 direct labor hour per fender, at a standard cost of $11.50 per hour.
Read the requiremen).
Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U).
(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)
Formula
Variance
Direct materials cost variance
Direct labor cost variance
=
=
Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC =
actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)
The
=
Direct materials efficiency variance
Direct labor efficiency variance
Does the pattern of variances suggest Great Fender's managers have been making trade-offs? Explain.
=
Formula
The
net effect on the total direct materials variance is
(...)
direct materials cost variance combined with the
direct labor cost variance combined with the
performed more efficiently. The net effect on the total direct labor variance is
Variance
direct materials efficiency variance suggests that managers may have used
direct labor efficiency variance suggests that managers may have used
direct materials. The
workers who
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