Homework Help is Here – Start Your Trial Now!
Business
Accounting
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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
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
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.
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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Risk Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS