Portland Inc. (PI) has developed standard costs for direct materials and direct labor. For the current year Pl estimated the following costs for one of their major products, the P122: Direct Materials Direct Labor Units Standard Quantity 0.25 pounds per unit 0.70 hours per unit 30,000 Standard Price $25 per pound $15 per hour PI's actual results for the year were production and sales of 33,500 units using 8,100 pounds of direct materials for a total material cost of $216,675 and direct manufacturing labor cost was $13 per hour for a total direct labor cost of $341,250. a. Calculate a full analysis of the direct materials price, efficiency, and flexible budget variances. b. Calculate a full analysis of the direct labor price, efficiency, and flexible budget variances. c. Comment on possible causes of the direct labor price and efficiency variances. Focus on causes of the variance NOT repeating financial results from your analysis above.
Portland Inc. (PI) has developed standard costs for direct materials and direct labor. For the current year Pl estimated the following costs for one of their major products, the P122: Direct Materials Direct Labor Units Standard Quantity 0.25 pounds per unit 0.70 hours per unit 30,000 Standard Price $25 per pound $15 per hour PI's actual results for the year were production and sales of 33,500 units using 8,100 pounds of direct materials for a total material cost of $216,675 and direct manufacturing labor cost was $13 per hour for a total direct labor cost of $341,250. a. Calculate a full analysis of the direct materials price, efficiency, and flexible budget variances. b. Calculate a full analysis of the direct labor price, efficiency, and flexible budget variances. c. Comment on possible causes of the direct labor price and efficiency variances. Focus on causes of the variance NOT repeating financial results from your analysis above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
no handwritten thanks
Transcribed Image Text:Portland Inc. (PI) has developed standard costs for direct materials and direct labor. For
the current year Pl estimated the following costs for one of their major products, the P122:
Direct Materials
Direct Labor
Units
Standard Quantity
0.25 pounds per unit
0.70 hours per unit
30,000
Standard Price
$25 per pound
$15 per hour
PI's actual results for the year were production and sales of 33,500 units using 8,100 pounds of direct
materials for a total material cost of $216,675 and direct manufacturing labor cost was $13 per hour for
a total direct labor cost of $341,250.
a. Calculate a full analysis of the direct materials price, efficiency, and flexible budget variances.
b. Calculate a full analysis of the direct labor price, efficiency, and flexible budget variances.
c. Comment on possible causes of the direct labor price and efficiency variances. Focus on causes of
the variance NOT repeating financial results from your analysis above.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
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