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KBG Manufacturing has the following
|
Direct materials ( 5 ft. @ $5) |
$25 |
|
Direct labour (1 hours @ $10) |
10 |
|
Variable |
4 |
|
Fixed overhead ( 1 hours@ $2*) |
2 |
|
Standard unit cost |
41 |
*Rate based on expected activity of 15,000 hours.
During the most recent year, the following actual results were recorded:
|
Production |
10,000 units |
|
Fixed overhead |
$30,000 |
|
Variable overhead |
$57,000 |
|
Direct materials (71,250 ft. purchased) |
$361,620 |
|
Direct labour (15,900 hours) |
$ 182,580 |
Required:
Compute the following variances:
1. Direct materials price and usage variances.
2. Direct labour rate and efficiency variances
Step by step
Solved in 2 steps
- The expected total overhead cost when 120,000 machine hours was used is:Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour). 37 Standard cost per unit $ 101 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factory's capacity of 20,000 units per month. Following are the company's budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials. $ 45,000 Indirect labor 180,000 Power 45,000 Maintenance 90,000 360,000 Total variable overhead costs Fixed overhead costs 24,000 Depreciation-Building Depreciation-Machinery 80,000 Taxes and insurance 12,000 Supervisory salaries. 79,000 Total fixed overhead costs 195,000 Total overhead costs $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 pounds @ $5.10 per…The following standard costs per unit, of one product, have been taken from the records of Bahrain Company. Direct materials 5 kgs at $3 per kg Direct labor 2.5 hours at $10 per hour Actual data for last month: Units produced: 12,000 Direct materials used: 35,000 kgs Direct material price: $4 per kg Direct labor hours: 22,000 Direct labor rate per hour: $9 Direct materials purchased: 100,000 kgs Required: (n) Compute the price and efficiency variances for direct materials and direct labor. Direct material price variance to be calculated at the time of purchase. (6) Prepare the journal entries to record the price and efficiency variances for direct materials and direct labor. For the toolbar, press ALT+F10 (PC) or ALT+FN-F10 (Mac).
- Wyckam Manufacturing Incorporated has provided the following estimates concerning its manufacturing costs: Cost per Machine- Hour $ 4.25 Direct materials Direct labor Supplies Utilities Depreciation Insurance Fixed Cost per Month $ 36,800 $ 1,400 $ 16,700 $ 12,700 For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machine-hours in June. Note that the company's direct labor is a fixed cost. Required: Prepare the company's planning budget for June. Wyckam Manufacturing Incorporated Planning Budget for Manufacturing Costs For the Month Ended June 30 Budgeted machine-hours Direct materials Direct labor Supplies Utilities Depreciation Insurance Total manufacturing cost $ 0.30 $ 0.05 $ $ 36,000 16,000 1,500 1,650 16,700 1,200 73,050QUESTION: AT THE BEGINNING OF THE YEAR, RANGLE COMPANY EXPECTED TO INCUR $54,000 OF OVERHEAD COSTS IN PRODUCING 6,000 UNITS OF PRODUCT. THE DIRECT MATERIAL COST IS $20 PER UNIT OF PRODUCT. DIRECT LABOR COST IS $30 PER UNIT. DURING JANUARY, 600 UNITS WERE PRODUCED. REQUIRED: THE TOTAL COST OF THE UNITS MADE IN JANUARY WAS:Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $458,780 Number of setups 580 Ordering costs 354,900 Number of orders 16,900 Machine costs 710,600 Machine hours 41,800 Receiving 417,100 Receiving hours 9,700 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $578,000 $772,000 Direct labor $470,000 $459,000 Units completed 15,500 8,500 Direct labor hours 5,300 2,100 Number of setups 370 210 Number of orders 5,000 11,900 Machine hours 24,000 17,800 Receiving hours 2,800 6,900 The company's normal activity is 7,400 direct labor hours. Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost Model A $fill in…
- At the beginning of the year, you estimated the following - Production - 75,000 units Raw Material - 270,000 pounds at a cost of $1,026,000 Direct Labor - 187,500 hours at a cost of $4,125,000 Variable Overhead - 135,000 machine hours at a cost of $567,000 Fixed Overhead - $900,000 At the end of year, the actual results were as follows - Production - 73,000 units Raw Material - 265,720 pounds purchased and used at a cost of $1,036,308 Direct Labor - 179,580 hours at a cost of $3,968,718 Variable Overhead - 133,590 machine hours at a cost of $558,406.20 Fixed Overhead - $891,000Doogan Corporation makes a product with the following standard costs: Standard Quantity or Standard Price or Hours Rate Direct materials Direct labor Variable overhead 9.0 grams e.4 hours $ 3.60 per gram $36.00 per hour $ 8.60 per hour e.4 hours The company produced 6,800 units in January using 40.910 grams of direct material and 2.540 direct labor-hours. During the month, the company purchased 46,000 grams of the direct material at $3.30 per gram. The actual direct labor rate was $35.30 per hour and the actual varlable overhead rate was $8.40 per hour. The company applies varlable overhead on the basis of direct labor-hours. The direct materials purchases varlance is computed when the materials are purchased. The varlable overhead rate varlance for January is:The following standard costs per unit, of one product, have been taken from the records of Bahrain Company: Direct materials 4 kgs at $6 per kg Direct labor 2 hours at $20 per hour Actual data for last month: Units produced: 20,000 Direct labor hours: 44,000 Direct materials used: 70,000 kgs Direct labor rate per hour: $18 Direct material price: $8 per kg Direct materials purchased: 200,000 kgs Required: (a) Compute the price and efficiency variances for direct materials and direct labor. Direct material price variance to be calculated at the time of purchase. (b) Prepare the journal entries to record the price and efficiency variances for direct materials and direct labor.
- Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year: Overhead Item Expected Cost Cost Driver Expected Quantity Setup costs $ 59,500 Number of setups 250 Ordering costs 49,000 Number of orders 1,500 Maintenance 138,000 Machine hours 2,000 Power 29,500 Kilowatt hours 4,000 Total Overhead $ 276,000 Total direct labor hours budgeted = 2,000 hours. The following actual data applies to one of the products completed during the year: Product X Direct materials $ 6,900 Number of setups 5 Direct labor $ 4,900 Number of orders 50 Units completed 100 Machine hours 50 Direct labor hours 100 Kilowatt hours 500 If Orange, Inc. uses machine hours to allocate overhead cost, the unit product cost of Product X will be: Multiple Choice $117.00. $137.00 $147.00 $167.00. $187.00.The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor Costs Busiest month (June) 14,000 $ 265,000 Slowest month (December) 6,000 $ 129,000 What are the direct labor costs per machine hour?Wyckam Manufacturing Incorporated has provided the following estimates concerning its manufacturing costs: Direct materials Direct labor Supplies Utilities Depreciation Insurance Fixed Cost per Month $ 42,100 $ 1,200 $ 14,600 $ 11,400 For example, utilities should be $1,200 per month plus $0.25 per machine-hour. The company expects to work 4,000 machine- hours in June. Note that the company's direct labor is a fixed cost. Direct materials Direct labor Cost per Machine- Hour $ 5.50 Required: Prepare the company's planning budget for June. Wyckam Manufacturing Incorporated Planning Budget for Manufacturing Costs For the Month Ended June 30 Supplies Utilities Depreciation Insurance Total manufacturing cost $ 0.30 $ 0.25
