he following information is for the standard and actual costs for Happy Corporation: Enter favorable variances as negative numbers. Standard Costs: Budgeted units of production - 16,000 [80% (or normal) capacity] Standard labor hours per unit - 4 Standard labor rate - $26 per hour Standard material per unit - 8 lb. Standard material cost - $12 per pound Standard variable overhead rate - $15 per labor hour Budgeted fixed overhead - $640,000 Fixed overhead rate is based on budgeted labor hours at 80% (or normal) capacity. Actual Cost: Actual production - 16,500 units Actual material purchased and used - 130,000 pounds Actual total material cost - $1,600,000 Actual labor - 65,000 hours Actual total labor costs - $1,700,000 Actual variable overhead - $1,000,000 Actual fixed overhead - $640,000 a. Determine the following: Quantity variance: $fill in the blank 1 Price variance: $fill in the blank 3 Total direct material cost variance: $fill in the blank 5 b. Determine the following: Time variance: $fill in the blank 7 Rate variance: $fill in the blank 9 Total direct labor cost variance: $fill in the blank 11 c. Determine the following: Volume variance: $fill in the blank 13 Controllable variance: $fill in the blank 15 Total factory overhead cost variance: $fill in the blank 17

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The following information is for the standard and actual costs for Happy Corporation:

Enter favorable variances as negative numbers.

Standard Costs:

Budgeted units of production - 16,000 [80% (or normal) capacity]

Standard labor hours per unit - 4

Standard labor rate - $26 per hour

Standard material per unit - 8 lb.

Standard material cost - $12 per pound

Standard variable overhead rate - $15 per labor hour

Budgeted fixed overhead - $640,000

Fixed overhead rate is based on budgeted labor hours at 80% (or normal) capacity.

Actual Cost:

Actual production - 16,500 units

Actual material purchased and used - 130,000 pounds

Actual total material cost - $1,600,000

Actual labor - 65,000 hours

Actual total labor costs - $1,700,000

Actual variable overhead - $1,000,000

Actual fixed overhead - $640,000

a. Determine the following:

Quantity variance:	$fill in the blank 1
Price variance:	$fill in the blank 3
Total direct material cost variance:	$fill in the blank 5

b. Determine the following:

Time variance:	$fill in the blank 7
Rate variance:	$fill in the blank 9
Total direct labor cost variance:	$fill in the blank 11

c. Determine the following:

Volume variance:	$fill in the blank 13
Controllable variance:	$fill in the blank 15
Total factory overhead cost variance:	$fill in the blank 17

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 9 images

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Hello, I have a follow-up question. For parts a, b, and c are each of the calculations favorable or unfavorable?

a. Determine the following:
Direct materials:
Quantity variance:
Price variance:
Total cost variance:
b. Determine the following:
Direct labor:
Time variance:
Rate variance:
Total cost variance:
c. Determine the following:
Factory overhead:
Volume variance:
Controllable variance:
Total cost variance:
24,000
40,000
64,000
26,000
10,000
36,000
10,000
-10,000
100

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions