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Premium Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 144,000 square feet of extruded vinyl purchased at $1.25 per square foot. Production required 410 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.30 per square foot. The labor standard was 0.024 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost, SQ = standard quantity.)

Premium Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 144,000 square feet of extruded vinyl purchased at $1.25 per square foot. Production required 410 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.30 per square foot. The labor standard was 0.024 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost, SQ = standard quantity.)

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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Premium Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 144,000 square feet of extruded vinyl purchased at $1.25 per square foot. Production required 410 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.30 per square foot. The labor standard was 0.024 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Direct materials cost variance Direct labor cost variance 11 11 Formula Print Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Premium Fender's managers have been making trade-offs? Explain. = Done Variance X
Transcribed Image Text:Premium Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 144,000 square feet of extruded vinyl purchased at $1.25 per square foot. Production required 410 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.30 per square foot. The labor standard was 0.024 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Direct materials cost variance Direct labor cost variance 11 11 Formula Print Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Premium Fender's managers have been making trade-offs? Explain. = Done Variance X
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