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Lily Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $6.00 per pound Direct labor-2.00 hours at $11.85 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit Direct materials (3,890 pounds) Direct labor (7,300 hours) Variable overhead Fixed overhead Total manufacturing costs The predetermined manufacturing overhead rate is $12 per direct labor hour ($24.00+2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,800 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $70,800 ($6.00 per hour) and total fixed overhead costs of $70,800 ($6.00 per hour). Actual costs for October in producing 3,700 units were as follows. (a) Total materials variance $23,729 Materials price variance 87.965 Compute all of the materials and labor variances. $ 63,934 26,966 $202.594 The purchasing department buys the quantities of raw materials that are expected to be used in production each month, Raw materials inventories, therefore, can be ignored. $6.00 23.70 12.00 12.00 $53.70

Lily Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $6.00 per pound Direct labor-2.00 hours at $11.85 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit Direct materials (3,890 pounds) Direct labor (7,300 hours) Variable overhead Fixed overhead Total manufacturing costs The predetermined manufacturing overhead rate is $12 per direct labor hour ($24.00+2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,800 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $70,800 ($6.00 per hour) and total fixed overhead costs of $70,800 ($6.00 per hour). Actual costs for October in producing 3,700 units were as follows. (a) Total materials variance $23,729 Materials price variance 87.965 Compute all of the materials and labor variances. $ 63,934 26,966 $202.594 The purchasing department buys the quantities of raw materials that are expected to be used in production each month, Raw materials inventories, therefore, can be ignored. $6.00 23.70 12.00 12.00 $53.70

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. (a) Compute all of the materials and labor variances. Total materials variance Materials price variance Materials quantity variance Total Jabor variance Labor price variance Labor quantity variance (b) Compute the total overhead variance Total overhead variance
Transcribed Image Text:The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. (a) Compute all of the materials and labor variances. Total materials variance Materials price variance Materials quantity variance Total Jabor variance Labor price variance Labor quantity variance (b) Compute the total overhead variance Total overhead variance
Lily Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $6.00 per pound Direct labor-2.00 hours at $11.85 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit Direct materials (3,890 pounds) Direct labor (7,300 hours) Variable overhead Fixed overhead Total manufacturing costs (a) The predetermined manufacturing overhead rate is $12 per direct labor hour ($24.00 +2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,800 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $70,800 ($6.00 per hour) and total fixed overhead costs of $70,800 ($6.00 per hour). Actual costs for October in producing 3,700 units were as follows. $23,729 87.965 Total materials variance 63,934 26,966 $202,594 Compute all of the materials and labor variances. Materials price variance $6.00 23.70 12.00 The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. 12.00 $53.70
Transcribed Image Text:Lily Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $6.00 per pound Direct labor-2.00 hours at $11.85 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit Direct materials (3,890 pounds) Direct labor (7,300 hours) Variable overhead Fixed overhead Total manufacturing costs (a) The predetermined manufacturing overhead rate is $12 per direct labor hour ($24.00 +2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,800 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $70,800 ($6.00 per hour) and total fixed overhead costs of $70,800 ($6.00 per hour). Actual costs for October in producing 3,700 units were as follows. $23,729 87.965 Total materials variance 63,934 26,966 $202,594 Compute all of the materials and labor variances. Materials price variance $6.00 23.70 12.00 The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. 12.00 $53.70
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