Question No. 7 During June HASF company material purchases amounted to 5,000 pounds at a price of 7 per pound. Actual costs incurred in the production of 5,000 units were as follows Total direct labor cost 100,000 @10 per hour Cost of Material used 70,000 The standards for one units of company product are as follows Direct Labor Direct Material - 3 hours required for one unit - Rate 24 per hour -2 pounds of Material required for one unit - Price 20 per pound Required: a. Compute the following Material variance • Material quantity variance Material price variance b. Being an accounting expert, elaborate that how standard costing system facilitates managerial planning, reduction in production costs and decision making. Use your analytical thinking to answer the question (Word limit: 150-200 words max)

Question No. 7 During June HASF company material purchases amounted to 5,000 pounds at a price of 7 per pound. Actual costs incurred in the production of 5,000 units were as follows Total direct labor cost 100,000 @10 per hour Cost of Material used 70,000 The standards for one units of company product are as follows Direct Labor Direct Material - 3 hours required for one unit - Rate 24 per hour -2 pounds of Material required for one unit - Price 20 per pound Required: a. Compute the following Material variance • Material quantity variance Material price variance b. Being an accounting expert, elaborate that how standard costing system facilitates managerial planning, reduction in production costs and decision making. Use your analytical thinking to answer the question (Word limit: 150-200 words max)

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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Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $215,160 Machine hours Assembly 189,550 Direct labor hours Inspecting 30,520 Number of inspections Setup 39,730 Number of setups Materials handling 36,960 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 5,180 4,600 9,780 Direct labor hours 4,460 6,690 11,150 Number of inspections 1,660 520 2,180 Number of setups 230 60 290 Number of loads 700 180 880 Units produced 10,400 5,200 15,600 a. Determine the activity rate for each activity. If required, round the rate to the…
< Prev A company uses the following standard costs to produce a single unit of output. Direct materials Direct Manufacturing pounds at $0.70 per pound- 0.4 hour at $8.00 per hour labor $ 5.60 $ 3.20 $ 1.96 overhead 53 0.4 hour at $4.90 per hour - During the latest month, the company purchased and used 77,000 pounds of direct materials ata price of $0.90 per pound to produce 10,000 units of output Direct le month totaled $29,100 based on 3,880 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15 600 and fixed manufacturing overhee $10,000. Based on this information, the direct materials price variace for the month was: Multiple Choice $2,000 favorable $15,400 unfavorable $5,600 unfavorable $6,400 unfavorable Ne $5,600 favorable 23 of 25
Required Information During June, Danby Company's material purchases amounted to 6,600 pounds at a price of $7.90 per pound. Actual costs incurred in the production of 2,300 units were as follows: Direct labor: Direct material: $ 131,835 ($18.70 per hour) $ 37,920 ($7.90 per pound) The standards for one unit of Danby Company's product are as follows: Direct Labor: Quantity, 3 hours per unit Rate, $18.60 per hour Required: Fill in the amounts in the tables below. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Fill in the amounts in the tables below. Note: Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).). Round "Actual Price" and "Standard Price" to 2 decimal places. Actual Material Cost Actual Quantity pounds used x X Actual Price Direct Material: Quantity, 2 pounds per unit Price, $7.60 per pound per pound Direct-material price variance…
TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product. Direct Materials Direct Labor Standard Quantity 8 pounds 0.25 hour Standard Price $ 3.80 per pound $ 12.00 per hour Standard Cost $ 30.40 3.00 $ 33.40 During November, TaskMaster purchased 170,000 pounds of direct materials at a total cost of $663.000. The total factory wages for November were $62.000, 90% of which were for direct labor. TaskMaster manufactured 20,100 units of product during November using 150.750 pounds of direct materials and 5.200 direct labor-hours. What is the direct labor rate variance for November? Multiple Choice $1,874 $2,900 $6,600 54.200
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