LO.3 (Comprehensive) Piedmont Manufacturing produces metal products with the following standard quantity and cost information: Direct Material 4 sheets at $4 $ 16 Aluminum Copper 3 sheets at $8 24 7 hours at $16 5 machine hours at $6 5 machine hours at $4 Direct labor 112 Variable overhead 30 Fixed overhead 20

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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determine the budget variance

LO.3 (Comprehensive) Piedmont Manufacturing produces metal products with the
following standard quantity and cost information:
Direct Material
Aluminum
4 sheets at $4
$ 16
Copper
3 sheets at $8
24
Direct labor
7 hours at $16
112
5 machine hours at $6
5 machine hours at $4
Variable overhead
30
Fixed overhead
20
Overhead rates were based on normal monthly capacity of 6,000 machine hours.
During November, the company produced only 850 units because of a labor strike,
which occurred during union contract negotiations. After the dispute was settled, the
company scheduled overtime to try to meet regular production levels. The following
costs were incurred in November:
Material
Aluminum
4,000 sheets purchased at $3.80; used 3,500 sheets
Copper
3,000 sheets purchased at $8.40; used 2,600 sheets
Direct Labor
Regular time
5,200 hours at $16 (pre-contract settlement)
Regular time
900 hours at $17 (post-contract settlement)
Variable Overhead
$23,300 (based on 4,175 machine hours)
Fixed Overhead
$18,850 (based on 4,175 machine hours)
Transcribed Image Text:LO.3 (Comprehensive) Piedmont Manufacturing produces metal products with the following standard quantity and cost information: Direct Material Aluminum 4 sheets at $4 $ 16 Copper 3 sheets at $8 24 Direct labor 7 hours at $16 112 5 machine hours at $6 5 machine hours at $4 Variable overhead 30 Fixed overhead 20 Overhead rates were based on normal monthly capacity of 6,000 machine hours. During November, the company produced only 850 units because of a labor strike, which occurred during union contract negotiations. After the dispute was settled, the company scheduled overtime to try to meet regular production levels. The following costs were incurred in November: Material Aluminum 4,000 sheets purchased at $3.80; used 3,500 sheets Copper 3,000 sheets purchased at $8.40; used 2,600 sheets Direct Labor Regular time 5,200 hours at $16 (pre-contract settlement) Regular time 900 hours at $17 (post-contract settlement) Variable Overhead $23,300 (based on 4,175 machine hours) Fixed Overhead $18,850 (based on 4,175 machine hours)
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