Financial Account. Pro Fender, which uses a standard cost system, manufactured 20,000 boatfenders during 2016, using 146,000 square feet of extruded vinylpurchased at $1.05 per square foot. Production required 410 direct laborhours that cost $15.00 per hour. The direct materials standard was sevensquare feet of vinyl per fender, at a standard cost of $1.10 per square foot.The labor standard was 0.026 direct labor hour per fender, at a standardcost of $14.00 per hour.Compute the cost and efficiency variances for direct materials and directlabor. Does the pattern of variances suggest Pro Fender's managers havebeen making trade-offs? Explain.

Step 1: Identify the Given InformationDirect MaterialsActual quantity purchased and used (AQ):…

Answered: Pro Fender, which uses a standard cost…

Principles of Accounting Volume 2

19th Edition

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Author:OpenStax

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Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...

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Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
ro Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2016, using 146,000 square feet of extruded vinyl purchased at $1.05 per square foot. Production required 410 direct labor hours that cost $15.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.10 per square foot. The labor standard was 0.026 direct labor hour per fender, at a standard cost of $14.00 per hour. Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Pro Fender's managers have been making trade-offs? Explain.
Premium Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2016, using 141,000 square feet of extruded vinyl purchased at $1.35 per square foot. Production required 470 direct labor hours that cost $16.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.40 per square foot. The labor standard was 0.028 direct labor hour per fender, at a standard cost of $15.00 per hour. 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. 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…
Quality Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 142,000 square feet of extruded vinyl purchased at $1.10 per square foot. Production required 430 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 $1.15 per square foot. The labor standard was 0.025 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.) Formula Variance Direct materials cost variance Direct labor cost variance Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of…
Premium Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 144,000 square feet of extruded vinyl purchased at $1.05 per square foot. Production required 460 direct labor hours that cost $15.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.10 per square foot. The labor standard was 0.025 direct labor hour per fender, at a standard cost of $14.50 per hour. Read the requirement LOADING... . 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.) Formula Variance Direct materials cost variance = (AC - SC) x AQ = Direct labor cost…
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K Superior Guard, which used a standard cost accounting system, manufactured 200,000 boat fenders during the year, using 1,300,000 feet of extruded vinyl purchased at $1.40 per foot. Production required 4,800 direct labor hours that cost $15.00 per hour. The materials standard was 6 feet of vinyl per fender at a standard cost of $1.45 per foot. The labor standard was 0.025 direct labor hour per fender at a standard cost of $13.50 per hour. Read the requirements. Requirement 1. Compute the price and quantity variances for direct materials. Compute the rate and efficiency variances for direct labor. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials, DL = Direct labor.) Begin with the variances for direct materials. First, determine the formula for the direct materials price variance, then compute the price…
ABC Company uses a standard cost accounting system. During 2018, ABC manufactured 20,000 products. The company used 144,000 pounds of material which it bought at $1.05 a pound. The production of the 20,000 products required 420 direct labor hours that cost $13.50 per hour. The direct materials standard was 7 pounds of material per product at a standard cost of $1.10 per pound. The direct labor standard was .025 direct labor hours per product at a standard cost of $12.50 per hour. The company allocates manufacturing overhead based on the following rates: Standard variable overhead allocation rate: $10 per direct labor hour Standard fixed overhead allocation rate: $40 per direct labor hour For 2018, the actual variable overhead was $4,950; the actual fixed overhead was $23,000. For 2018, the budgeted fixed overhead was $22,000 TO DO: 1. Compute the cost and efficiency variance for Direct Materials 2. Compute the cost and efficiency variances for Direct Labor 3. Compute the variable…
RampUp Storage Containers produces a 1,000-cubic-foot metal storage unit that is used by storage companies and other businesses needing low-cost, mobile storage units. The units sell for $3,000 per unit. The company uses a standard costing system. At the start of 2016, standard costs were set as follows: Standard cost per unit: $1,200 Material cost (6 prefabricated metal sheets × $200) Direct labor (10 hours × $20) 200 Overhead ($500 per unit) 500 Total $1,900 The overhead rate was calculated as follows: At the start of 2016, the company estimated that it would produce and sell 5,000 units and incur $500,000 of variable overhead costs and $2,000,000 of fixed overhead costs: Variable overhead Fixed overhead $ 500,000 2,000,000 2,500,000 5,000 Total Divided by estimated production Overhead cost per unit $ 500 Based on estimated sales, standard costs, and other information, the following budget was pre- pared: 2016 Budget (Expected Production and Sales of 5,000 Units) Sales $15,000,000…
Eminem, Inc. manufactures music CDs. At the start of 2021, Eminem planned to produce 110,000 CDs for which the standard cost for each CD is: Plastic (0.25 pounds at $6.00 per pound) $1.50 Labor (0.10 hour at $12.00 per hour) 1.20 Overhead ($0.70 fixed and $0.90 variable) 1.60 Total $4.30 Overhead is allocated based on the number of units produced. Eminem isolates material purchase variances at the point of purchase. The following information summarizes Eminem’s results for 2021: Actual production 112,000 CDs Actual variable overhead $91,000 Actual fixed overhead $85,500 How much is the controllable overhead variance for 2021? $4,400 favorable $1,300 favorable $1,600 favorable $5,000 favorable $1,800 favorable
Cyber Lighting manufactures different models of LED ring lights. The company produced 7,000 units of one model, the UltraXZ, in 2020. Total direct materials costs related to production of UltraXZs were $205,000. Production employees spent 3,400 direct labor hours on the UltraXZ, and total UltraXZ direct labor costs were $81,000. Cyber allocates overhead based on direct labor hours, and the 2020 predetermined overhead rate was $4 per direct labor hour. What was the 2020 per unit cost for the UltraXZ? $42.80 $40.86 $87.14 $31.23
C & H Corp. uses a standard cost system, manufactured 18,000 bumper cars during 2021 using 154,000 square feet of rubber purchased at $1.00 per square foot. Production required 415 direct labor hours costing $17 per hour. The direct materials standard was 7 square feet of rubber per car, at a cost of 1.20 per square foot. The labor standard was 0.025 direct labor hours per car, at a standard cost of $13. Calculate the direct materials cost variance. (AC ? SC) ? AQ Direct Materials Cost Variance Favorable or Unfavorable

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