Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory has a denominator activity level of 780 direct labour-hours each month, which should result in the production of 1,950 robes. The standard costs associated with this level of production are as follows: 80 Direct materials Direct labour Variable manufacturing overhead* Fixed manufacturing overhead* *Based on direct labour-hours Direct materials (6,000 metres) Direct labour Variable manufacturing overhead Fixed manufacturing overhead During April, the factory worked only 760 direct labour-hours and produced 2,000 robes. The following actual costs were recorded during the month: ssibility: Good to go Total $35,490 $7,020 $2,340 $4,680 O Total d Per Unit of Product $36,000 $7,600 $3,800 $4,600 $18.20 3.60 1.20 2.40 $25.40 Per Unit of Product At standard, each robe should require 2.8 metres of material. All of the materials purchased during the month were used in production. $18.00 3.80 1.90 Required: Compute the following variances for April: 1. The materials price and quantity variances. 2. The labour rate and efficiency variances. 3. The variable manufacturing overhead spending and efficiency variances. 4. The fixed manufacturing overhead budget and volume variances. 2.30 $26.00 8 DII →>
Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory has a denominator activity level of 780 direct labour-hours each month, which should result in the production of 1,950 robes. The standard costs associated with this level of production are as follows: 80 Direct materials Direct labour Variable manufacturing overhead* Fixed manufacturing overhead* *Based on direct labour-hours Direct materials (6,000 metres) Direct labour Variable manufacturing overhead Fixed manufacturing overhead During April, the factory worked only 760 direct labour-hours and produced 2,000 robes. The following actual costs were recorded during the month: ssibility: Good to go Total $35,490 $7,020 $2,340 $4,680 O Total d Per Unit of Product $36,000 $7,600 $3,800 $4,600 $18.20 3.60 1.20 2.40 $25.40 Per Unit of Product At standard, each robe should require 2.8 metres of material. All of the materials purchased during the month were used in production. $18.00 3.80 1.90 Required: Compute the following variances for April: 1. The materials price and quantity variances. 2. The labour rate and efficiency variances. 3. The variable manufacturing overhead spending and efficiency variances. 4. The fixed manufacturing overhead budget and volume variances. 2.30 $26.00 8 DII →>
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Helix Company produces several products in its factory, including a karate robe. The
company uses a standard cost system to assist in the control of costs. According to the
standards that have been set for the robes, the factory has a denominator activity level
of 780 direct labour-hours each month, which should result in the production of 1,950
robes. The standard costs associated with this level of production are as follows:
80
Direct materials
Direct labour
Variable manufacturing overhead*
Fixed manufacturing overhead*
*Based on direct labour-hours
Direct materials (6,000 metres)
Direct labour
Variable manufacturing overhead
Fixed manufacturing overhead
Total
$35,490
$7,020
$2,340
$4,680
During April, the factory worked only 760 direct labour-hours and produced 2,000 robes.
The following actual costs were recorded during the month:
Accessibility: Good to go
Total
$36,000
$ 7,600
Per Unit of
Product
$3,800
$4,600
$18.20
3.60
1.20
2.40
$25.40
Per Unit of
Product
$18.00
3.80
1.90
2.30
$26.00
At standard, each robe should require 2.8 metres of material. All of the materials
purchased during the month were used in production.
Required:
Compute the following variances for April:
1. The materials price and quantity variances.
2. The labour rate and efficiency variances.
3. The variable manufacturing overhead spending and efficiency variances.
4. The fixed manufacturing overhead budget and volume variances.
DII
го
F9
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