Problem 11-49 Complete Analysis of Cost Variances; Review of Chapters 10 and 11 (LO 11-5) Chillco Corporation produces containers of frozen food. During April, Chillco produced 810 cases of food and incurred the following actual costs. Variable overhead. Fixed overhead Actual labor cost (3,000 direct-labor hours) Actual material cost (13,000 pounds purchased and used) Standard Costs per Case Direct labor (3 hours at $18 per hour). Direct material (15 pounds at $2.30 per pound) Overhead is budgeted and applied using direct-labor hours in a standard costing system. Standard cost and annual budget information are as follows: Variable overhead (3 direct-labor hours at $2.50 per hour) Fixed overhead (3 direct-labor hours at $2 per hour) Total $ 54.00 34.50 Variable overhead. Fixed overhead Planned activity for year 7.50 $ 7,400 5,800 6.00 $102.00 Annual Budget Information $75,000 $ 60,000 30,000 direct-labor hours. 55,800 33,800
Problem 11-49 Complete Analysis of Cost Variances; Review of Chapters 10 and 11 (LO 11-5) Chillco Corporation produces containers of frozen food. During April, Chillco produced 810 cases of food and incurred the following actual costs. Variable overhead. Fixed overhead Actual labor cost (3,000 direct-labor hours) Actual material cost (13,000 pounds purchased and used) Standard Costs per Case Direct labor (3 hours at $18 per hour). Direct material (15 pounds at $2.30 per pound) Overhead is budgeted and applied using direct-labor hours in a standard costing system. Standard cost and annual budget information are as follows: Variable overhead (3 direct-labor hours at $2.50 per hour) Fixed overhead (3 direct-labor hours at $2 per hour) Total $ 54.00 34.50 Variable overhead. Fixed overhead Planned activity for year 7.50 $ 7,400 5,800 6.00 $102.00 Annual Budget Information $75,000 $ 60,000 30,000 direct-labor hours. 55,800 33,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:Problem 11-49 Complete Analysis of Cost Variances; Review of Chapters 10 and 11 (LO 11-5)
Chillco Corporation produces containers of frozen food. During April, Chillco produced 810 cases of food and incurred the following
actual costs.
Variable overhead
Fixed overhead
Actual labor cost (3,000 direct-labor hours)
Actual material cost (13,000 pounds purchased and used)
Overhead is budgeted and applied using direct-labor hours in a standard costing system. Standard cost and annual budget
information are as follows:
Standard Costs per Case
Direct labor (3 hours at $18 per hour)
Direct material (15 pounds at $2.30 per
pound)
Variable overhead (3 direct-labor hours at
$2.50 per hour)
Fixed overhead (3 direct-labor hours at $2
per hour)
Total
Annual Budget Information
$75,000
Variable overhead
Fixed overhead
Planned activity for year
$ 54.00
34.50
7.50
6.00
$ 7,400
5,800
55,800
33,800
$102.00
$ 60,000
30,000 direct-labor hours.
Transcribed Image Text:Required:
Compute the following cost variances from the available data. (Indicate the effect of each variance by selecting "Favorable" or
"Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). Do not round intermediate calculations.)
Direct-material price variance
Direct-material purchase price variance
Direct-material quantity variance
Direct-labor rate variance
Direct-labor efficiency variance
Variable-overhead spending variance
Variable-overhead efficiency variance
Fixed-overhead budget variance
Fixed-overhead volume variance
Unfavorable
Unfavorable
Unfavorable
Unfavorable
Unfavorable
Favorable
Unfavorable
Unfavorable
Unfavorable
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