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Griffen Company makes pipe using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 12,000 units. Griffen maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a unit of pipe follows: Direct material Direct labor Vanable overhead Fixed overhead 6 pounds @$5 2 hours $25 6 pounds @5 2 $30.00 50.00 12.00 20.00 $112.00 August financial results show that the average purchase price of metal was $5.30 per pound. The purchase price variance $34,590 unfavorable. The variable overhead efficiency variance was 8,000 unfavorable. Good output produced totaled 15,000 units. Required: a. How many pounds of metal were purchased in August? (Do not round intermediate calculations.) Metais purchased pounds b. What was the direct material efficiency variance in August? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Efficiency variance c. How many pounds of metal were used in August? Metals used pounds

Griffen Company makes pipe using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 12,000 units. Griffen maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a unit of pipe follows: Direct material Direct labor Vanable overhead Fixed overhead 6 pounds @$5 2 hours $25 6 pounds @5 2 $30.00 50.00 12.00 20.00 $112.00 August financial results show that the average purchase price of metal was $5.30 per pound. The purchase price variance $34,590 unfavorable. The variable overhead efficiency variance was 8,000 unfavorable. Good output produced totaled 15,000 units. Required: a. How many pounds of metal were purchased in August? (Do not round intermediate calculations.) Metais purchased pounds b. What was the direct material efficiency variance in August? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Efficiency variance c. How many pounds of metal were used in August? Metals used pounds

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Griffen Company makes pipe using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 12,000 units. Griffen maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a unit of pipe follows: Direct material Direct labor Variable overhead Fixxed overhead Metals purchased 6 pounds @$ 5 2 hours $25 6 pounds @5 2 August financial results show that the average purchase price of metal was $5.30 per pound. The purchase price variance $34,590 unfavorable. The variable overhead efficiency variance was 8,000 unfavorable. Good output produced totaled 15,000 units. Required: a. How many pounds of metal were purchased in August? (Do not round intermediate calculations.) pounds b. What was the direct material efficiency variance in August? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Efficiency variance c. How many pounds of metal were used in August? Metals used $ 30.00 50.00 12.00 20.00 $112.00 pounds
Transcribed Image Text:Griffen Company makes pipe using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 12,000 units. Griffen maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a unit of pipe follows: Direct material Direct labor Variable overhead Fixxed overhead Metals purchased 6 pounds @$ 5 2 hours $25 6 pounds @5 2 August financial results show that the average purchase price of metal was $5.30 per pound. The purchase price variance $34,590 unfavorable. The variable overhead efficiency variance was 8,000 unfavorable. Good output produced totaled 15,000 units. Required: a. How many pounds of metal were purchased in August? (Do not round intermediate calculations.) pounds b. What was the direct material efficiency variance in August? (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Efficiency variance c. How many pounds of metal were used in August? Metals used $ 30.00 50.00 12.00 20.00 $112.00 pounds
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