oogan Corporation makes a product with the following standard costs Standard Quantity or Hours Direct materials Direct labor Variable overhead 2.0 grams 1.0 hours 1.0 hours Standard Price or Rate $7.00 per gram $18.00 per hour $ 2.00 per hour The company produced 4.700 units in January using 10.160 grams of direct material and 2.140 direct labor-hours. During the month, the company purchased 10,730 grams of the direct material at $7.30 per gram. The actual direct labor rate was $18.85 per hour and the actual wariable overhead rate was $1.80 per hour.
oogan Corporation makes a product with the following standard costs Standard Quantity or Hours Direct materials Direct labor Variable overhead 2.0 grams 1.0 hours 1.0 hours Standard Price or Rate $7.00 per gram $18.00 per hour $ 2.00 per hour The company produced 4.700 units in January using 10.160 grams of direct material and 2.140 direct labor-hours. During the month, the company purchased 10,730 grams of the direct material at $7.30 per gram. The actual direct labor rate was $18.85 per hour and the actual wariable overhead rate was $1.80 per hour.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 28P: Haversham Corporation produces dress shirts. The company uses a standard costing system and has set...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Doogan Corporation makes a product with the following standard costs:
Standard
Quantity or
Hours
Direct materials
Direct labor
Variable overhead
2.0 grams
1.0 hours
1.0 hours
Standard Price or
Rate
$7.00 per gram
$18.00 per hour
$ 2.00 per hour
The company produced 4,700 units in January using 10.160 grams of direct material and 2.140 direct labor-hours. During the month, the
company purchased 10,730 grams of the direct material at $7.30 per gram. The actual direct labor rate was $18.85 per hour and the actual
variable overhead rate was $1.80 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the
materials are purchased
The materials quantity variance for January is
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