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Landers Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Standard cost per unit Actual costs used in production of 12,000 units 1.80 feet at $3.00 per 24,000 feet purchased at a total cost of $69,900, used only 21,000 feet in production Direct materials foot Direct 0.90 hours at $18.00 11,400 hours at $17.40 per hour labor per hour Variable 0.90 hours at $5.00 11,400 hours at a total cost of $62,600 overhead per hour Required: 1. Compute the total standard cost per unit and total actual cost per unit. How much is the difference between the actual unit costs and standard cost? 2. Compute the following variances for May: Materials quantity and price variances. a. b. Labor efficiency and rate variances. с. Variable overhead efficiency and rate variances. 3. Discuss the main reasons for the difference between the actual unit costs and standard cost you computed in (1).

Landers Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Standard cost per unit Actual costs used in production of 12,000 units 1.80 feet at $3.00 per 24,000 feet purchased at a total cost of $69,900, used only 21,000 feet in production Direct materials foot Direct 0.90 hours at $18.00 11,400 hours at $17.40 per hour labor per hour Variable 0.90 hours at $5.00 11,400 hours at a total cost of $62,600 overhead per hour Required: 1. Compute the total standard cost per unit and total actual cost per unit. How much is the difference between the actual unit costs and standard cost? 2. Compute the following variances for May: Materials quantity and price variances. a. b. Labor efficiency and rate variances. с. Variable overhead efficiency and rate variances. 3. Discuss the main reasons for the difference between the actual unit costs and standard cost you computed in (1).

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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Landers Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Standard cost per unit Actual costs used in production of 12,000 units 1.80 feet at $3.00 per 24,000 feet purchased at a total cost of $69,900, used only 21,000 feet in production Direct materials foot Direct 0.90 hours at $18.00 11,400 hours at $17.40 per hour labor per hour Variable 0.90 hours at $5.00 11,400 hours at a total cost of $62,600 overhead per hour Required: 1. Compute the total standard cost per unit and total actual cost per unit. How much is the difference between the actual unit costs and standard cost? 2. Compute the following variances for May: Materials quantity and price variances. a. b. Labor efficiency and rate variances. с. Variable overhead efficiency and rate variances. 3. Discuss the main reasons for the difference between the actual unit costs and standard cost you computed in (1).
Transcribed Image Text:Landers Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Standard cost per unit Actual costs used in production of 12,000 units 1.80 feet at $3.00 per 24,000 feet purchased at a total cost of $69,900, used only 21,000 feet in production Direct materials foot Direct 0.90 hours at $18.00 11,400 hours at $17.40 per hour labor per hour Variable 0.90 hours at $5.00 11,400 hours at a total cost of $62,600 overhead per hour Required: 1. Compute the total standard cost per unit and total actual cost per unit. How much is the difference between the actual unit costs and standard cost? 2. Compute the following variances for May: Materials quantity and price variances. a. b. Labor efficiency and rate variances. с. Variable overhead efficiency and rate variances. 3. Discuss the main reasons for the difference between the actual unit costs and standard cost you computed in (1).
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