Required: 1. Prepare a schedule of standard production costs for January, based on actual product 2. For the month of January, compute the following variances.
Required: 1. Prepare a schedule of standard production costs for January, based on actual product 2. For the month of January, compute the following variances.
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:Required:
1. Prepare a schedule of standard production costs for January, based on actual production of 7,800 units.
2. For the month of January, compute the following variances.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare a schedule of standard production costs for January, based on actual production of 7,800 units.
NEW JERSEY VALVE COMPANY: CAMDEN PLANT
Schedule of Standard Production Costs
Based on 7,800 Units
For the Month of January
Direct material
Direct labor
Total standard production costs
Required 1
Required 2
Standard Costs
Complete this question by entering your answers in the tabs below.
$
a. Direct-material price variance
b. Direct-material quantity variance
c. Direct-material purchase price variance
d. Direct-labor rate variance
e. Direct-labor efficiency variance
0
For the month of January, compute the following variances. (Indicate the effect of each variance by selecting "Favorable" or
"Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
Unfavorable
Favorable
Unfavorable
Favorable
Unfavorable
< Required 1
Required 2 >
Transcribed Image Text:New Jersey Valve Company manufactured 7,800 units during January of a control valve used by milk processors in its Camden plant.
Records indicated the following:
Direct labor
Direct material
purchased
Direct material used
hr. at $14.60 per
40,100 hr.
25,000 lb. at $2.60 per lb.
23,100 lb.
The control valve has the following standard prime costs:
Direct material 3 lb. at $2.50 per lb.
Direct labor
5 hr. at $15.00 per hr.
Standard prime cost per unit
$7.50
75.00
$82.50
Required:
1. Prepare a schedule of standard production costs for January, based on actual production of 7,800 units.
2. For the month of January, compute the following variances.
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