Req 3 Controllable Variance the overhead volume variances. (Indicate the effect of the Req 2 Volume variance tal overhead erhead applied ance Req 3 Volume Variance
Req 3 Controllable Variance the overhead volume variances. (Indicate the effect of the Req 2 Volume variance tal overhead erhead applied ance Req 3 Volume Variance
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 33P: Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of...
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Question
7 part 2
![Req 1
Req 2
Req 3
Controllable
Variance
Compute the overhead volume variances. (Indicate the effect of the variance by selecting favorable, unfavorable, or no
variance.)
Volume variance
Budgeted total overhead
Standard overhead applied
Volume variance
Req 3 Volume
Variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1799000-33ab-4b28-9bb2-f03cfa8defbf%2F41d5295c-2609-437c-9e6e-642a6602b5f4%2Fg31iqjf_processed.png&w=3840&q=75)
Transcribed Image Text:Req 1
Req 2
Req 3
Controllable
Variance
Compute the overhead volume variances. (Indicate the effect of the variance by selecting favorable, unfavorable, or no
variance.)
Volume variance
Budgeted total overhead
Standard overhead applied
Volume variance
Req 3 Volume
Variance
![Trini Company set the following standard costs per unit for its single product
Direct materials (30 pounds @ $5.50 per pound)
Direct labor (7 hours @ $14 per hour)
Variable overhead (7 hours @ $6 per hour)
Fixed overhead (7 hours @ $12 per hour)
Standard cost per unit
Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of
the company's capacity of 62,000 units per quarter. The following additional information is available.
Operating Levels
Production (in units)
Standard direct labor hours (7 DLH/unit)
Budgeted overhead (flexible budget)
Fixed overhead
Variable overhead
$ 165.00
98.00
42.00
84.00
$ 389.00
70%
43, 400
303, 800
$ 4, 166, 400
$ 1,822, 800
Direct materials (1,674, 000 pounds @ $5.50 per pound)
Direct labor (390, 600 hours @ $14 per hour)
Overhead (390, 600 hours @ $18 per hour)
Standard (budgeted) cost
Actual costs incurred during the current quarter follow.
Direct materials (1,658,000 pounds @ $7.60 per pound)
Direct labor (386, 600 hours @ $12.00 per hour)
Fixed overhead
Variable overhead
Actual cost
80%
49, 600
347, 200
During the current quarter, the company operated at 90% of capacity and produced 55,800 units; actual direct labor
totaled 386,600 hours. Units produced were assigned the following standard costs.
$ 4,166, 400
$ 4,166,400
$ 2,083, 200 $ 2,343, 600
$ 9,207,000
5,468, 400
7,030, 800
$ 21, 706, 200
90%
55,800
390, 600
$ 12, 600, 800
4,639, 200
3,321, 400
3,109,400
$ 23,670, 800
Required:
1. Compute the direct materials variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.
3. Compute the overhead controllable and volume variances.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1799000-33ab-4b28-9bb2-f03cfa8defbf%2F41d5295c-2609-437c-9e6e-642a6602b5f4%2F0nl3gv_processed.png&w=3840&q=75)
Transcribed Image Text:Trini Company set the following standard costs per unit for its single product
Direct materials (30 pounds @ $5.50 per pound)
Direct labor (7 hours @ $14 per hour)
Variable overhead (7 hours @ $6 per hour)
Fixed overhead (7 hours @ $12 per hour)
Standard cost per unit
Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of
the company's capacity of 62,000 units per quarter. The following additional information is available.
Operating Levels
Production (in units)
Standard direct labor hours (7 DLH/unit)
Budgeted overhead (flexible budget)
Fixed overhead
Variable overhead
$ 165.00
98.00
42.00
84.00
$ 389.00
70%
43, 400
303, 800
$ 4, 166, 400
$ 1,822, 800
Direct materials (1,674, 000 pounds @ $5.50 per pound)
Direct labor (390, 600 hours @ $14 per hour)
Overhead (390, 600 hours @ $18 per hour)
Standard (budgeted) cost
Actual costs incurred during the current quarter follow.
Direct materials (1,658,000 pounds @ $7.60 per pound)
Direct labor (386, 600 hours @ $12.00 per hour)
Fixed overhead
Variable overhead
Actual cost
80%
49, 600
347, 200
During the current quarter, the company operated at 90% of capacity and produced 55,800 units; actual direct labor
totaled 386,600 hours. Units produced were assigned the following standard costs.
$ 4,166, 400
$ 4,166,400
$ 2,083, 200 $ 2,343, 600
$ 9,207,000
5,468, 400
7,030, 800
$ 21, 706, 200
90%
55,800
390, 600
$ 12, 600, 800
4,639, 200
3,321, 400
3,109,400
$ 23,670, 800
Required:
1. Compute the direct materials variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.
3. Compute the overhead controllable and volume variances.
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