labor (7 hours @ $14 per hour) e overhead (7 hours @ $6 per hour) verhead (7 hours @ $12 per hour) d cost per unit 98.00 42.00 84.00 $ 389.00 is applied using direct labor hours. The standard overhead rate is based o ny's capacity of 62,000 units per quarter. The following additional informa Operating Leve ion (in units) d direct labor hours (7 DLH/unit) overhead (flexible budget) overhead ble overhead 70% 43, 400 303, 800 80% 49,600 347, 200 $ 4,166, 400 $ 4,166,400 $ 1,822,800 $ 2,083, 200 current quarter, the company operated at 90% of capacity and produced
labor (7 hours @ $14 per hour) e overhead (7 hours @ $6 per hour) verhead (7 hours @ $12 per hour) d cost per unit 98.00 42.00 84.00 $ 389.00 is applied using direct labor hours. The standard overhead rate is based o ny's capacity of 62,000 units per quarter. The following additional informa Operating Leve ion (in units) d direct labor hours (7 DLH/unit) overhead (flexible budget) overhead ble overhead 70% 43, 400 303, 800 80% 49,600 347, 200 $ 4,166, 400 $ 4,166,400 $ 1,822,800 $ 2,083, 200 current quarter, the company operated at 90% of capacity and produced
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 17P: Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per...
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Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Question
7 part 4
![Trini Company set the following standard costs per unit for its single product
Direct materials (30 pounds @ $5.50 per pound)
Direct labor (7 hours @ $14 per hour)
Variable overhead (7 hours @ $6 per hour)
Fixed overhead (7 hours @ $12 per hour)
Standard cost per unit
Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of
the company's capacity of 62,000 units per quarter. The following additional information is available.
Operating Levels
Production (in units)
Standard direct labor hours (7 DLH/unit)
Budgeted overhead (flexible budget)
Fixed overhead
Variable overhead
$ 165.00
98.00
42.00
84.00
$ 389.00
70%
43, 400
303, 800
$ 4, 166, 400
$ 1,822, 800
Direct materials (1,674, 000 pounds @ $5.50 per pound)
Direct labor (390, 600 hours @ $14 per hour)
Overhead (390, 600 hours @ $18 per hour)
Standard (budgeted) cost
Actual costs incurred during the current quarter follow.
Direct materials (1,658,000 pounds @ $7.60 per pound)
Direct labor (386, 600 hours @ $12.00 per hour)
Fixed overhead
Variable overhead
Actual cost
80%
49, 600
347, 200
During the current quarter, the company operated at 90% of capacity and produced 55,800 units; actual direct labor
totaled 386,600 hours. Units produced were assigned the following standard costs.
$ 4,166, 400
$ 4,166,400
$ 2,083, 200 $ 2,343, 600
$ 9,207,000
5,468, 400
7,030, 800
$ 21, 706, 200
90%
55,800
390, 600
$ 12, 600, 800
4,639, 200
3,321, 400
3,109,400
$ 23,670, 800
Required:
1. Compute the direct materials variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.
3. Compute the overhead controllable and volume variances.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1799000-33ab-4b28-9bb2-f03cfa8defbf%2Fba276b4e-fc51-48de-8c03-bab5a7094885%2Frp8aru4_processed.png&w=3840&q=75)
Transcribed Image Text:Trini Company set the following standard costs per unit for its single product
Direct materials (30 pounds @ $5.50 per pound)
Direct labor (7 hours @ $14 per hour)
Variable overhead (7 hours @ $6 per hour)
Fixed overhead (7 hours @ $12 per hour)
Standard cost per unit
Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of
the company's capacity of 62,000 units per quarter. The following additional information is available.
Operating Levels
Production (in units)
Standard direct labor hours (7 DLH/unit)
Budgeted overhead (flexible budget)
Fixed overhead
Variable overhead
$ 165.00
98.00
42.00
84.00
$ 389.00
70%
43, 400
303, 800
$ 4, 166, 400
$ 1,822, 800
Direct materials (1,674, 000 pounds @ $5.50 per pound)
Direct labor (390, 600 hours @ $14 per hour)
Overhead (390, 600 hours @ $18 per hour)
Standard (budgeted) cost
Actual costs incurred during the current quarter follow.
Direct materials (1,658,000 pounds @ $7.60 per pound)
Direct labor (386, 600 hours @ $12.00 per hour)
Fixed overhead
Variable overhead
Actual cost
80%
49, 600
347, 200
During the current quarter, the company operated at 90% of capacity and produced 55,800 units; actual direct labor
totaled 386,600 hours. Units produced were assigned the following standard costs.
$ 4,166, 400
$ 4,166,400
$ 2,083, 200 $ 2,343, 600
$ 9,207,000
5,468, 400
7,030, 800
$ 21, 706, 200
90%
55,800
390, 600
$ 12, 600, 800
4,639, 200
3,321, 400
3,109,400
$ 23,670, 800
Required:
1. Compute the direct materials variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.
3. Compute the overhead controllable and volume variances.
![Req 1
Req 2
Req 3
Controllable
Variance
Compute the overhead volume variances. (Indicate the effect of the variance by selecting favorable, unfavorable, or no
variance.)
Volume variance
Budgeted total overhead
Standard overhead applied
Volume variance
Req 3 Volume
Variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1799000-33ab-4b28-9bb2-f03cfa8defbf%2Fba276b4e-fc51-48de-8c03-bab5a7094885%2Ftk801vo_processed.png&w=3840&q=75)
Transcribed Image Text:Req 1
Req 2
Req 3
Controllable
Variance
Compute the overhead volume variances. (Indicate the effect of the variance by selecting favorable, unfavorable, or no
variance.)
Volume variance
Budgeted total overhead
Standard overhead applied
Volume variance
Req 3 Volume
Variance
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