Pippin Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Direct materials Direct labor Variable manufacturing Standard Quantity or Hours per Unit of Output Standard Price or Rate 5.0 0.30 grams $7.00 hours $ 21.30 per gram per hour nor
Pippin Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Direct materials Direct labor Variable manufacturing Standard Quantity or Hours per Unit of Output Standard Price or Rate 5.0 0.30 grams $7.00 hours $ 21.30 per gram per hour nor
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:Pippin Inc. has provided the following data concerning one of the products in its standard cost system. Variable
manufacturing overhead is applied to products on the basis of direct labor-hours.
Inputs
Direct materials
Direct labor
Variable manufacturing
overhead
Actual output
Raw materials purchased
Actual price of raw materials
Raw materials used in production
Actual direct labor-hours
Actual direct labor rate
Actual variable overhead rate
Standard Quantity or Hours per Unit
of Output
$5,325 U
• $5,425 F
$5,425 U
• $5,325 F
The company has reported the following actual results for the product for June:
.
.
8,500 units.
48,100 grams
$ 7.70
per gram
42,490 grams
2,300 hours
$ 21.70
$9.80
The labor efficiency variance for the month is closest to:
Multiple Choice
per hour
per hour
Standard Price or
Rate
5.0
0.30
0.30
grams $7.00
hours
$21.30
hours $ 9.60
per
gram
per
hour
per
hour
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