Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot. Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves.

Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot. Compute the direct materials price and quantity variances incurred in manufacturing these bookshelves.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...

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Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at 0.38 per pound. Actual direct labor used was 91,000 hours at 12.10 per hour. Required: 1. Calculate the direct materials price and usage variances. 2. Calculate the direct labor rate and efficiency variances. 3. Prepare the journal entries for the direct materials and direct labor variances. 4. Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.
Rosser Company produces a container that requires 4 yards of material per unit. The standard price of one yard of material is $4.50. During the month, 9,500 containers were manufactured using 37,300 yards of material. Required: Journalize the entry to record the standard direct materials used in production. If an amount box does not require an entry, leave it blank
McDaniel Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor: Direct materials (100 lbs. @ $1.00 per lb.) $100.00 Direct labor (0.5 hours at $24 per hour) 12.00 Total standard prime cost per 100-lb. bag $112.00 The following activities were recorded for October: 1,000 bags were manufactured. 95,000 lbs. of materials costing $76,000 were purchased. 102,500 lbs. of materials were used. $12,000 was paid for 475 hours of direct labor. There were no beginning or ending work-in-process inventories. Required: A. Compute the direct materials variances. Materials price variance $fill in the blank 1 Favorable Materials usage variance $fill in the blank 3 Unfavorable B. Compute the direct labor variances. Labor rate variance $fill in the blank 5 Unfavorable Labor efficiency variance $fill in the blank 7 Favorable
Mark Corp. makes a chair with the following standard costs for direct materials and direct labor: Direct materials: 2 meters @ P3.25 per meter P6.50 Direct labor: 0.40 hours @ P12 per hour P4.80 During the month of December, 25,000 units of chairs were produced. The costs related to the production of these chairs were as follows: Direct materials purchased 60,000 meters @ P3.15 per meter Direct materials used in the production 52,500 meters Direct labor 9,875 hours @ P12.20 per hour The standard cost variances for direct materials and direct labor are as follows: Labor Efficiency Variance 124 hours @ P12 per hour 1,500 F Labor Rate Variance 9,875 hours @ PO.20 per hour 1,975 U Material Price Variance 60,000 meters @ PO.10 per meter 6,000 F Material Quantity Variance 2,500 meters @ P3.25 per meter 8,125 U Prepare the journal entries to record the purchased of materials, used of materials and labor incurrence.
Tiago's Electronics uses a standard costing system. Tiago's Electronics purchased 28,000 feet of direct material at the cost of $5 per foot. The standard cost is $5.30 per foot, and it takes 12 feet of direct material to make one unit of product. This month, 3,000 units were produced, and all 28,000 feet of material were used in production. A. What is the journal entry to record the purchase of direct materials on the account? B. What is the journal entry to record the use of direct materials in production? Milford Inc. has a debt-to-equity ratio of 0.80. It has total shareholders' equity of $2.5 million and current liabilities of $750,000. How much long-term debt is outstanding? A. $2,375,000 B. $2,100,000 C. $3,125,000 D. $1,250,000
Tipton Company manufactures shirts. During June, Tipton made 1,200shirts and gathered the following additional data: Direct materials cost standard $6.00 per yard of fabric Direct materials efficiency standard 1.50 yards per shirt Actual amount of fabric purchased and used 1,680 yards Actual cost of fabric purchased and used $10,500 Direct labor cost standard $15.00 per DLHr Direct labor efficiency standard 2.00 DLHr per shirt Actual amount of direct labor hours 2,520 DLHr Actual cost of direct labor $36,540 7. Calculate the directmaterials cost variance. Select the formula, then enter the amounts and compute the cost variance for direct materials and identify whether the variance is favorable (F) or unfavorable (U). ( - ) × = Direct Materials Cost Variance ( - ) × = 8. Calculate the direct materials efficiency variance. Select the formula, then enter the amounts and…
Tipton Company manufactures shirts. During June, Tipton made 1,200shirts and gathered the following additional data: Direct materials cost standard $6.00 per yard of fabric Direct materials efficiency standard 1.50 yards per shirt Actual amount of fabric purchased and used 1,680 yards Actual cost of fabric purchased and used $10,500 Direct labor cost standard $15.00 per DLHr Direct labor efficiency standard 2.00 DLHr per shirt Actual amount of direct labor hours 2,520 DLHr Actual cost of direct labor $36,540 10. Calculate the direct labor cost variance. Select the formula, then enter the amounts and compute the cost variance for direct labor and identify whether the variance is favorable (F) or unfavorable (U). ( - ) × = Direct Labor Cost Variance ( - ) × = 11. Calculate the direct labor efficiency variance. Select the formula, then enter the amounts and compute the…
Quality Guard, which used a standard cost accounting system, manufactured 200,000 boat fenders during the year, using 1,250,000 feet of extruded vinyl purchased at $1.20 per foot. Production required 4,000 direct labor hours that cost $12.50 per hour. The materials standard was 6 feet of vinyl per fender at a standard cost of $1.35 per foot. The labor standard was 0.026 direct labor hour per fender at a standard cost of $12.00 per hour. Read the requirements. Requirement 1. Compute the price and quantity variances for direct materials. Compute the rate and efficiency variances for direct labor. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials, DL = Direct labor.) Begin with the variances for direct materials. First, determine the formula for the direct materials price variance, then compute the price…
The Household Company has established standard costs for the cabinet department, in which one size of MX cabinet is made. The standard costs of producing one of these MX cabinets are shown below: Direct material: lumber 50 board feet at P4 200 Direct labor: 8 hours at P10 80 Overhead costs: Variable – 8 hours at P5 40 Fixed – 8 hours at P3 24 Total standard unit cost 344 During June 2019, 500 of these cabinets were produced. The cost of operations during the month is shown below. Direct material purchased: 30,000 board feet at P4.10 123000 Direct materials used: 24,000 board feet Direct labor: 4,200 hours at P9.50 39,900 Overhead costs: Variable costs – P22,000 Fixed costs – P11,000 The budgeted overhead for the cabinet department…
Quality Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 142,000 square feet of extruded vinyl purchased at $1.10 per square foot. Production required 430 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.15 per square foot. The labor standard was 0.025 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement. 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 Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of…
Hear Smart manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following cost data: STANDARD COST INFORMATION QUANTITY COST Direct Materials 2 Parts $0.15 per part Direct Labor 0.02 hours 8.00 per hour Variable Manufacturing Overhead 0.02 hours 10 per hour Fixed Manufacturing Overhead ($28,500 for static budget volume of 95,000 units and 1,900 hours, or $15 per hour) ACTUAL COST INFORMATION Direct Materials (209,000 parts @ $0.20 per part) $ 41,800 Direct Labor (1,600 hours @ $8.15 per hour) 13,040 Variable Manufacturing Overhead 9,000 Fixed Manufacturing Overhead 26,000 REQUIREMENTS Compute the cost and efficiency variances for direct materials and direct labor. For manufacturing overhead, compute the variable overhead…
K Superior Guard, which used a standard cost accounting system, manufactured 200,000 boat fenders during the year, using 1,300,000 feet of extruded vinyl purchased at $1.40 per foot. Production required 4,800 direct labor hours that cost $15.00 per hour. The materials standard was 6 feet of vinyl per fender at a standard cost of $1.45 per foot. The labor standard was 0.025 direct labor hour per fender at a standard cost of $13.50 per hour. Read the requirements. Requirement 1. Compute the price and quantity variances for direct materials. Compute the rate and efficiency variances for direct labor. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials, DL = Direct labor.) Begin with the variances for direct materials. First, determine the formula for the direct materials price variance, then compute the price…