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Nakita Inc. makes a popular running jacket. The company is developing standards for material, labour, & variable manufacturing overhead. The standard cost for one jogging suit would be: SQ/SH SP/SR Standard Cost DM 3.5 yards $6/yard $21 DL 2.0 hours $18/hour $36 VMOH 2.0 hours $4/hour $8 Cost per Jacket $65 Data for last month's production: # of jackets produced 5,000 units

Nakita Inc. makes a popular running jacket. The company is developing standards for material, labour, & variable manufacturing overhead. The standard cost for one jogging suit would be: SQ/SH SP/SR Standard Cost DM 3.5 yards $6/yard $21 DL 2.0 hours $18/hour $36 VMOH 2.0 hours $4/hour $8 Cost per Jacket $65 Data for last month's production: # of jackets produced 5,000 units

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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am. 157.

Nakita Inc. makes a popular running jacket. The company is developing standards for material, labour, & variable manufacturing overhead. The standard cost for one jogging suit would be: SQ/SH SP/SR Standard Cost DM 3.5 yards $6/yard $21 DL 2.0 hours $18/hour $36 VMOH 2.0 hours $4/hour $8 Cost per Jacket $65 Data for last month's production: # of jackets produced 20000 yards of Material purchased Yards of Material used Cost of Direct Labour hours (10500 hours) Required: 5,000 units $118,000 20,000 yards $200,000 1. A. Compute the direct materials price and quantity variances. What is the total material variance? B. Please provide one reason why DM price and/or quantity is F or U? 2. A. Compute the direct labour rate and efficiency variances. What is the total labour variance? B. Please provide one reason why labour efficiency is F or U?
Transcribed Image Text:Nakita Inc. makes a popular running jacket. The company is developing standards for material, labour, & variable manufacturing overhead. The standard cost for one jogging suit would be: SQ/SH SP/SR Standard Cost DM 3.5 yards $6/yard $21 DL 2.0 hours $18/hour $36 VMOH 2.0 hours $4/hour $8 Cost per Jacket $65 Data for last month's production: # of jackets produced 20000 yards of Material purchased Yards of Material used Cost of Direct Labour hours (10500 hours) Required: 5,000 units $118,000 20,000 yards $200,000 1. A. Compute the direct materials price and quantity variances. What is the total material variance? B. Please provide one reason why DM price and/or quantity is F or U? 2. A. Compute the direct labour rate and efficiency variances. What is the total labour variance? B. Please provide one reason why labour efficiency is F or U?
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