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 $1.15 per square foot. Production required 410 direct labor hours that cost $12.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.20 per square foot. The labor standard was 0.027 direct labor hour per fender, at a standard cost of $11.50 per hour.

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 $1.15 per square foot. Production required 410 direct labor hours that cost $12.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.20 per square foot. The labor standard was 0.027 direct labor hour per fender, at a standard cost of $11.50 per hour.

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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Question

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 $1.15 per square foot. Production required 410 direct labor hours that cost $12.50 per hour. The direct
materials standard was seven square feet of vinyl per fender, at a standard cost of $1.20 per square foot. The labor standard was
0.027 direct labor hour per fender, at a standard cost of $11.50 per hour.
Read the requirement.

Requirement
Compute the
opsta
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.
Print
Done
I
X

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