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Larned Company makes a storage box using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 15.100 units. Larned maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a single bax follows: 0.5 pound @ $8 0.2 hours@ $30 0.5 pound $4 Direct material Direct labor Variable overhead Fixed overhead $ 4,00 6.00 2.00 3.00 $15.00 March financial results show that the average purchase price of metal was $9.00 per pound. The purchase price variance was $1,700 The variable overhead efficiency variance was $1,360 favorable Good output produced totaled 13.600 units. Required: a. How many pounds of metal were purchased in March? b. What was the direct materials efficiency variance in March? Note: Indicate the effect of this variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. c. How many pounds of met were used in March?

Larned Company makes a storage box using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 15.100 units. Larned maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a single bax follows: 0.5 pound @ $8 0.2 hours@ $30 0.5 pound $4 Direct material Direct labor Variable overhead Fixed overhead $ 4,00 6.00 2.00 3.00 $15.00 March financial results show that the average purchase price of metal was $9.00 per pound. The purchase price variance was $1,700 The variable overhead efficiency variance was $1,360 favorable Good output produced totaled 13.600 units. Required: a. How many pounds of metal were purchased in March? b. What was the direct materials efficiency variance in March? Note: Indicate the effect of this variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. c. How many pounds of met were used in March?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Larned Company makes a storage box using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 15,100 units. Larned maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a single box follows: Direct material Direct labor Variable overhead Fixed overhead 0.5 pound@ $8 0.2 hours @ $30 0.5 pound 54 $ 4.00 6.00 2.00 3.00 $15.00 March financial results show that the average purchase price of metal was $9.00 per pound. The purchase price variance was $1,700 The variable overhead efficiency variance was $1,360 favorable. Good output produced totaled 13.600 units. $7001. Required: a. How many pounds of metal were purchased in March? b. What was the direct materials efficiency variance in March? Note: Indicate the effect of this variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. c. How many pounds of metal were used in March?
Transcribed Image Text:Larned Company makes a storage box using metal. The company uses a standard costing system. Variable overhead is allocated on the basis of direct material usage (pounds). Overhead is allocated to units based on expected production of 15,100 units. Larned maintains a materials inventory, so the amount of material used is not necessarily the same as the amount of material purchased in any one month. The standard cost sheet for a single box follows: Direct material Direct labor Variable overhead Fixed overhead 0.5 pound@ $8 0.2 hours @ $30 0.5 pound 54 $ 4.00 6.00 2.00 3.00 $15.00 March financial results show that the average purchase price of metal was $9.00 per pound. The purchase price variance was $1,700 The variable overhead efficiency variance was $1,360 favorable. Good output produced totaled 13.600 units. $7001. Required: a. How many pounds of metal were purchased in March? b. What was the direct materials efficiency variance in March? Note: Indicate the effect of this variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. c. How many pounds of metal were used in March?
March financial results show that the average purchase price of metal was $9.00 per pound. The purchase price variance was $1,700 The variable overhead efficiency variance was $1,360 favorable. Good output produced totaled 13,600 units. Required: a. How many pounds of metal were purchased in March? b. What was the direct materials efficiency variance in March? Note: Indicate the effect of this variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. c. How many pounds of metal were used in March? a. Metals purchased b Efficiency variance c Metals used $ 1,700 pounds 2.720 F pounds
Transcribed Image Text:March financial results show that the average purchase price of metal was $9.00 per pound. The purchase price variance was $1,700 The variable overhead efficiency variance was $1,360 favorable. Good output produced totaled 13,600 units. Required: a. How many pounds of metal were purchased in March? b. What was the direct materials efficiency variance in March? Note: Indicate the effect of this variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. c. How many pounds of metal were used in March? a. Metals purchased b Efficiency variance c Metals used $ 1,700 pounds 2.720 F pounds
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