P12.53B (LO 2, 3) Sasha Clothiers is a small company that manufactures plus size suits. The company uses a standard cost accounting system. In May 2022, it produced 11,200 suits. The following standard and actual cost data applied to the month of May, when normal capacity was 14,000 direct labour hours. All materials purchased were used. Cost Element Standard (per unit) Direct materials 8 m at $4.40 per metre Direct 1.2 hours at $13.40 per hour labour Overhead 1.2 hours at $6.10 per hour (fixed $3.50; variable $2.60) Actual $375,575 for 90,500 m ($4.15 per metre) $200,220 for 14,200 hours ($14.10 per hour) $49,000 fixed overhead $37,000 variable overhead Overhead is applied based on direct labour hours. At normal capacity, the budgeted fixed overhead costs are $49,000, and the budgeted variable overhead is $36,400. Instructions a. Calculate all of the materials and labour variances. a. MPV: $22,625 F b. Calculate the total overhead budget and volume variances. c. Which of the materials and labour variances should be investigated if management considers a variance of more than 4% from standard to be significant? Calculate variances.
P12.53B (LO 2, 3) Sasha Clothiers is a small company that manufactures plus size suits. The company uses a standard cost accounting system. In May 2022, it produced 11,200 suits. The following standard and actual cost data applied to the month of May, when normal capacity was 14,000 direct labour hours. All materials purchased were used. Cost Element Standard (per unit) Direct materials 8 m at $4.40 per metre Direct 1.2 hours at $13.40 per hour labour Overhead 1.2 hours at $6.10 per hour (fixed $3.50; variable $2.60) Actual $375,575 for 90,500 m ($4.15 per metre) $200,220 for 14,200 hours ($14.10 per hour) $49,000 fixed overhead $37,000 variable overhead Overhead is applied based on direct labour hours. At normal capacity, the budgeted fixed overhead costs are $49,000, and the budgeted variable overhead is $36,400. Instructions a. Calculate all of the materials and labour variances. a. MPV: $22,625 F b. Calculate the total overhead budget and volume variances. c. Which of the materials and labour variances should be investigated if management considers a variance of more than 4% from standard to be significant? Calculate variances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:P12.53B (LO 2, 3) Sasha Clothiers is a small company that manufactures plus size suits. The company uses a standard cost
accounting system. In May 2022, it produced 11,200 suits.
The following standard and actual cost data applied to the month of May, when normal capacity was 14,000 direct labour
hours. All materials purchased were used.
Cost
Element
Standard (per unit)
Direct
materials
8 m at $4.40 per metre
Direct
1.2 hours at $13.40 per hour
labour
Overhead
1.2 hours at $6.10 per hour (fixed $3.50;
variable $2.60)
Actual
$375,575 for 90,500 m ($4.15 per
metre)
$200,220 for 14,200 hours ($14.10 per
hour)
$49,000 fixed overhead $37,000
variable overhead
Overhead is applied based on direct labour hours. At normal capacity, the budgeted fixed overhead costs are $49,000, and
the budgeted variable overhead is $36,400.
Instructions
a. Calculate all of the materials and labour variances.
a. MPV: $22,625 F
b. Calculate the total overhead budget and volume variances.
c. Which of the materials and labour variances should be investigated if management considers a variance of more than 4%
from standard to be significant?
Calculate variances.
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education