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Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income DM DL Input Variable-MOH Actual Results Fixed-MOH 10,000 $1,670,000 560,500 216,000 130,500 Here are the company's standard cost cards for each product cost. 763,000 306,000 $457,000 Quantity Standards 3.0 yards 1.6 hours 1.6 hours. Flexible Budget 1.6 hours Price Standards $18.00 per yard $11.00 per hour $7.50 per hour $15.50 per hour Master Budget 12,000 $2,076,000 648,000 211,200 144,000 1,072,800 297,600 $775,200 Standard Cost per Unit $54.00 $17.60 $12.00 $24.80

Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income DM DL Input Variable-MOH Actual Results Fixed-MOH 10,000 $1,670,000 560,500 216,000 130,500 Here are the company's standard cost cards for each product cost. 763,000 306,000 $457,000 Quantity Standards 3.0 yards 1.6 hours 1.6 hours. Flexible Budget 1.6 hours Price Standards $18.00 per yard $11.00 per hour $7.50 per hour $15.50 per hour Master Budget 12,000 $2,076,000 648,000 211,200 144,000 1,072,800 297,600 $775,200 Standard Cost per Unit $54.00 $17.60 $12.00 $24.80

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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Determine the following specific variances for each product cost. 1. DM price and efficiency variances (29,500 yards of DM were purchased and used; Oriole paid $19.00/yard for the material). DM price variance DM efficiency variance $ DL price variance $ DL efficiency variance 2. DL price and efficiency variances (18,000 DL hours were used; Oriole paid $12.00/hour). $ $ Variable-MOH price variance Fixed-MOH price variance Variable-MOH efficiency variance tA $ tA 29,500 3. Variable-MOH price and efficiency variances (MOH is applied based on DL hours). $ Fixed-MOH volume variance $ 9000 $ 18000 22000 Unfavorable Favorable Unfavorable Unfavorable 4. Fixed-MOH price and volume variances (MOH is applied based on DL hours). 81000 15000 63000 31000 Favorable Unfavorable Unfavorable Unfavorable
Transcribed Image Text:Determine the following specific variances for each product cost. 1. DM price and efficiency variances (29,500 yards of DM were purchased and used; Oriole paid $19.00/yard for the material). DM price variance DM efficiency variance $ DL price variance $ DL efficiency variance 2. DL price and efficiency variances (18,000 DL hours were used; Oriole paid $12.00/hour). $ $ Variable-MOH price variance Fixed-MOH price variance Variable-MOH efficiency variance tA $ tA 29,500 3. Variable-MOH price and efficiency variances (MOH is applied based on DL hours). $ Fixed-MOH volume variance $ 9000 $ 18000 22000 Unfavorable Favorable Unfavorable Unfavorable 4. Fixed-MOH price and volume variances (MOH is applied based on DL hours). 81000 15000 63000 31000 Favorable Unfavorable Unfavorable Unfavorable
Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income DM DL Input Variable-MOH Actual Results Fixed-MOH 10,000 $1,670,000 560,500 216,000 130,5 Here are the company's standard cost cards for each product cost. 763,000 306,000 $457,000 Quantity Standards 3.0 yards 1.6 hours 1.6 hours Flexible Budget 1.6 hours Price Standards $18.00 per yard $11.00 per hour $7.50 per hour $15.50 per hour Master Budget 12,000 $2,076,000 648,000 211,200 144,000 1,072,800 297,600 $775,200 Standard Cost per Unit $54.00 $17.60 $12.00 $24.80
Transcribed Image Text:Oriole Company's actual results reveal that it was profitable in the sale of its star product: a high-end spot-cleaning vacuum for upholstery. But it was not nearly as profitable as management had hoped. Oriole's actual income statement and master budget income statement are as follows. In order to keep the focus on product costs, SG&A costs were omitted. Units sold Revenues Variable costs DM DL Variable-MOH Contribution margin Fixed-MOH Operating income DM DL Input Variable-MOH Actual Results Fixed-MOH 10,000 $1,670,000 560,500 216,000 130,5 Here are the company's standard cost cards for each product cost. 763,000 306,000 $457,000 Quantity Standards 3.0 yards 1.6 hours 1.6 hours Flexible Budget 1.6 hours Price Standards $18.00 per yard $11.00 per hour $7.50 per hour $15.50 per hour Master Budget 12,000 $2,076,000 648,000 211,200 144,000 1,072,800 297,600 $775,200 Standard Cost per Unit $54.00 $17.60 $12.00 $24.80
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