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
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
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
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)
Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
