Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Direct materials: Standard: 1.90 feet at $4.00 per foot Actual: 1.85 feet at $4.40 per foot Direct labor: Standard: 1.10 hour at $16.00 per hour Actual: 1.15 hour at $15.40 per hour Variable overhead: Standard: 1.10 hour at $9.00 per hour Actual: 1.15 hour at $8.60 per hour Total cost per unit Excess of actual cost over standard cost per unit Standard Cost per Unit $ 7.60 Actual Cost per Unit 17.60 $ 8.14 9.90 17.71 9.89 $ 35.10 $ 35.74 $ 0.64 The production superintendent was pleased when he saw this report and commented: "This $0.64 excess cost is well within the 4 percent limit management has set for acceptable variances. It's obvious there's not much to worry about with this product." Actual production for the month was 17,500 units. Variable overhead cost is assigned to products based on direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Compute the following variances for May: a. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. How much of the $0.64 excess unit cost is traceable to each of the variances computed in Requirement 1? 3. How much of the $0.64 excess unit cost is traceable to apparent inefficient use of labor time? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 1a. Compute the following variances for May, materials price and quantity variances. 1b. Compute the following variances for May, labor rate and efficiency variances. 1c. Compute the following variances for May, variable overhead rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. 1a. Materials price variance 1a. Materials quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency variance Show less▲

Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Direct materials: Standard: 1.90 feet at $4.00 per foot Actual: 1.85 feet at $4.40 per foot Direct labor: Standard: 1.10 hour at $16.00 per hour Actual: 1.15 hour at $15.40 per hour Variable overhead: Standard: 1.10 hour at $9.00 per hour Actual: 1.15 hour at $8.60 per hour Total cost per unit Excess of actual cost over standard cost per unit Standard Cost per Unit $ 7.60 Actual Cost per Unit 17.60 $ 8.14 9.90 17.71 9.89 $ 35.10 $ 35.74 $ 0.64 The production superintendent was pleased when he saw this report and commented: "This $0.64 excess cost is well within the 4 percent limit management has set for acceptable variances. It's obvious there's not much to worry about with this product." Actual production for the month was 17,500 units. Variable overhead cost is assigned to products based on direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Compute the following variances for May: a. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. How much of the $0.64 excess unit cost is traceable to each of the variances computed in Requirement 1? 3. How much of the $0.64 excess unit cost is traceable to apparent inefficient use of labor time? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 1a. Compute the following variances for May, materials price and quantity variances. 1b. Compute the following variances for May, labor rate and efficiency variances. 1c. Compute the following variances for May, variable overhead rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. 1a. Materials price variance 1a. Materials quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency variance Show less▲

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 13EB: Stacks manufactures two different levels of hockey sticks: the Standard and the Slap Shot. The total...

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