Homework Help is Here – Start Your Trial Now!
Business
Accounting
Pest Away Company manufactures a product effective in controlling beetles. The company uses a standard cost system and a flexible budget. Standard cost ofa gallon is as follows: Direct material: 2 quarts of A 4 quarts of B Total direct material $14 16 $30 Direct labor: 2 hours 16 Manufacturing overhead Total 12 $58 The flexible budget system provides for $50,000 of fixed overhead at normal capacity of 10,000 direct labor hours. Variable overhead is projected at $1 per direct labor hour. Actual results for the period indicated the following: Production: Direct material: 5,000 gallons 12,000 quarts purchased at a cost of $7.20/quart; 10,500 quarts used 20,000 quarts purchased at a cost of $3.90/quart; 19,800 quarts used 9,800 hours worked at a cost of $79,380 Fixed A Direct labor: Overhead: $48,100 21.000 $69.100 Variable Total overhead Required: 1. What is the application rate per direct labor hour, the total overhead cost equation, the standard quantity for each material, and the standard hours? 2. Compute variances: a. Total material price variance b. Total material quantity variance c. Labor rate variance d. Labor efficiency variance e. MOH volume variance f. the following MOH efficiency variance g. MOH spending variance, both fixed and variable

Pest Away Company manufactures a product effective in controlling beetles. The company uses a standard cost system and a flexible budget. Standard cost ofa gallon is as follows: Direct material: 2 quarts of A 4 quarts of B Total direct material $14 16 $30 Direct labor: 2 hours 16 Manufacturing overhead Total 12 $58 The flexible budget system provides for $50,000 of fixed overhead at normal capacity of 10,000 direct labor hours. Variable overhead is projected at $1 per direct labor hour. Actual results for the period indicated the following: Production: Direct material: 5,000 gallons 12,000 quarts purchased at a cost of $7.20/quart; 10,500 quarts used 20,000 quarts purchased at a cost of $3.90/quart; 19,800 quarts used 9,800 hours worked at a cost of $79,380 Fixed A Direct labor: Overhead: $48,100 21.000 $69.100 Variable Total overhead Required: 1. What is the application rate per direct labor hour, the total overhead cost equation, the standard quantity for each material, and the standard hours? 2. Compute variances: a. Total material price variance b. Total material quantity variance c. Labor rate variance d. Labor efficiency variance e. MOH volume variance f. the following MOH efficiency variance g. MOH spending variance, both fixed and variable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
100%

Hi, I just need the answer in letter E thankyou in advance. The both picture are connected question pls bare with the pic :)

Case 2 Pest Away Company manufactures a product effective in controlling beetles. The company uses a standard cost system and a flexible budget. Standard cost of a gallon is as follows: Direct material: 2 quarts of A 4 quarts of B Total direct material $14 16 $30 Direct labor: 2 hours 16 Manufacturing overhead Total 12 $58 The flexible budget system provides for $50,000 of fixed overhead at normal capacity of 10,000 direct labor hours. Variable overhead is projected at $1 per direct labor hour. Actual results for the period indicated the following: Production: Direct 5,000 gallons material: 12,000 quarts purchased at a cost of $7.20/quart; 10,500 quarts used 20,000 quarts purchased at a cost of $3.90/quart; 19,800 quarts used 9,800 hours worked at a cost of $79,380 Fixed A Direct labor: Overhead: $48,100 21.000 $69.100 Variable Total overhead Required: 1. What is the application rate per direct labor hour, the total overhead cost equation, the standard quantity for each material, and the standard hours? 2. Compute variances: a. Total material price variance b. Total material quantity variance c. Labor rate variance d. Labor efficiency variance e. MOH volume variance f. MOH efficiency variance g. MOH spending variance, both fixed and variable the following
Transcribed Image Text:Case 2 Pest Away Company manufactures a product effective in controlling beetles. The company uses a standard cost system and a flexible budget. Standard cost of a gallon is as follows: Direct material: 2 quarts of A 4 quarts of B Total direct material $14 16 $30 Direct labor: 2 hours 16 Manufacturing overhead Total 12 $58 The flexible budget system provides for $50,000 of fixed overhead at normal capacity of 10,000 direct labor hours. Variable overhead is projected at $1 per direct labor hour. Actual results for the period indicated the following: Production: Direct 5,000 gallons material: 12,000 quarts purchased at a cost of $7.20/quart; 10,500 quarts used 20,000 quarts purchased at a cost of $3.90/quart; 19,800 quarts used 9,800 hours worked at a cost of $79,380 Fixed A Direct labor: Overhead: $48,100 21.000 $69.100 Variable Total overhead Required: 1. What is the application rate per direct labor hour, the total overhead cost equation, the standard quantity for each material, and the standard hours? 2. Compute variances: a. Total material price variance b. Total material quantity variance c. Labor rate variance d. Labor efficiency variance e. MOH volume variance f. MOH efficiency variance g. MOH spending variance, both fixed and variable the following
e. earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax rate.
Transcribed Image Text:e. earn 12 percent on sales revenue in after-tax income, assuming a 30 percent tax rate.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 17 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Written Representation
Learn more about
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS