Haliburton Mills Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product): Direct materials: Standard: 2.0 metres at $3.90 per metre Actual: 2.4 metres at $3.65 per metre Direct labour: Standard: 1.5 hours at $2.50 per hour Actual: 1.2 hours at $2.85 per hour Variable manufacturing overhead: Standard: 1.5 hours at $1.10 per hour Actual: 1.2 hours at $1.40 per hour Fixed manufacturing overhead: Standard: 1.5 hours at $3.30 per hour Actual: 1.2 hours at $3.40 per hour Total cost per unit Actual costs: 9,000 units at $17.94 Standard costs: 9,000 units at $18.15 Difference in cost-favourable $161,460 163,350 $ 1,890 Standard Cost Actual Cost $ 7.80 $ 8.76 3.75 3.42 1.65 1.68 4.95 4.08 $ 18.15 $ 17.94 During this period, the company produced 9,000 units of product. A comparison of standard and actual costs for the period on a total cost basis is also given above. There was no inventory of materials on hand to start the period. During the period, 21,600 metres of materials was purchased and used in production. The denominator level of activity for the period was 11,140 hours. Required: 1. For direct materials: a. Compute the price and quantity variances for the period. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Price variance Quantity variance
Haliburton Mills Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product): Direct materials: Standard: 2.0 metres at $3.90 per metre Actual: 2.4 metres at $3.65 per metre Direct labour: Standard: 1.5 hours at $2.50 per hour Actual: 1.2 hours at $2.85 per hour Variable manufacturing overhead: Standard: 1.5 hours at $1.10 per hour Actual: 1.2 hours at $1.40 per hour Fixed manufacturing overhead: Standard: 1.5 hours at $3.30 per hour Actual: 1.2 hours at $3.40 per hour Total cost per unit Actual costs: 9,000 units at $17.94 Standard costs: 9,000 units at $18.15 Difference in cost-favourable $161,460 163,350 $ 1,890 Standard Cost Actual Cost $ 7.80 $ 8.76 3.75 3.42 1.65 1.68 4.95 4.08 $ 18.15 $ 17.94 During this period, the company produced 9,000 units of product. A comparison of standard and actual costs for the period on a total cost basis is also given above. There was no inventory of materials on hand to start the period. During the period, 21,600 metres of materials was purchased and used in production. The denominator level of activity for the period was 11,140 hours. Required: 1. For direct materials: a. Compute the price and quantity variances for the period. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Price variance Quantity variance
Chapter1: Financial Statements And Business Decisions
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Problem 1Q
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Transcribed Image Text:Haliburton Mills Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The
standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product):
Direct materials:
Standard: 2.0 metres at $3.90 per metre
Actual: 2.4 metres at $3.65 per metre
Direct labour:
Standard: 1.5 hours at $2.50 per hour
Actual: 1.2 hours at $2.85 per hour
Variable manufacturing overhead:
Standard: 1.5 hours at $1.10 per hour
Actual: 1.2 hours at $1.40 per hour
Fixed manufacturing overhead:
Standard: 1.5 hours at $3.30 per hour
Actual: 1.2 hours at $3.40 per hour
Total cost per unit
Actual costs: 9,000 units at $17.94
Standard costs: 9,000 units at $18.15
Difference in cost-favourable
$161,460
163,350
$ 1,890
Standard
Cost
Actual
Cost
$ 7.80
$ 8.76
3.75
3.42
1.65
1.68
4.95
4.08
$ 18.15
$ 17.94
During this period, the company produced 9,000 units of product. A comparison of standard and actual costs for the period on a total
cost basis is also given above.
There was no inventory of materials on hand to start the period. During the period, 21,600 metres of materials was purchased and
used in production. The denominator level of activity for the period was 11,140 hours.
Required:
1. For direct materials:
a. Compute the price and quantity variances for the period. (Indicate the effect of each variance by selecting "F" for favourable, "U"
for unfavourable, and "None" for no effect (i.e., zero variance).)
Price variance
Quantity variance
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