**Logistics Solutions - Order Fulfillment Services Analysis**Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.---### Monthly Performance Data- **Items Shipped:** 165,000- **Direct Labor-Hours Used:** 6,800- **Variable Overhead Costs Incurred:** $22,100---### Company Standards- **Direct Labor-Hours per Item:** 0.04- **Variable Overhead Rate:** $3.30 per direct labor-hour---### Required Analysis1. **Standard Labor-Hours Allowed (SH) for 165,000 Items:**2. **Standard Variable Overhead Cost (SH × SR) for 165,000 Items:**3. **Variable Overhead Spending Variance:**4. **Variable Overhead Efficiency Variance:**---### Calculation Framework#### Standard Quantities and Rates- **SH (Standard Hours)** = Number of Items × Direct Labor-Hours per Item- **SR (Standard Rate)** = Variable Overhead Rate per Direct Labor-Hour#### Variance Calculations- **Variable Overhead Spending Variance:** Compare actual overhead costs to the expected costs based on actual hours worked.- **Variable Overhead Efficiency Variance:** Compare standard hours for actual production to actual hours used.### Table for Variance Analysis| | Favorable "F" | Unfavorable "U" | None (Zero Variance) "None" ||--------------------------|:-------------:|:---------------:|:----------------------------:|| Standard quantity of labor-hours allowed | F / U / None | F / U / None | F / U / None || Standard variable overhead cost allowed | F / U / None | F / U / None | F / U / None || Variable overhead spending variance | F / U / None | F / U / None | F / U / None || Variable overhead rate variance | F / U / None | F / U / None |

Name: **Logistics Solutions - Order Fulfillment Services Analysis**Logistic
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Description: **Logistics Solutions - Order Fulfillment Services Analysis**Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an o

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Required: 1. What is the standard labor-hours allowed (SH) to ship 165,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 165,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance?

Required: 1. What is the standard labor-hours allowed (SH) to ship 165,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 165,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance?

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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1. What are the three primary reasons of using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful? 2. What are ideal standards? What are currently attainable standards? Explain which standard is usually adopted and why. 3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to support your answer.
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Material, Labor, and Variable Overhead Variances The following summarized manufacturing data relate to Steffan Corporation's April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours. Direct material Standard (2 lb. @ $9.50/lb.) Actual (4,200 lb. @ $10.20/lb.) Direct labor Standard (0.5 hr. @ $24/hr.) Actual (970 hrs. @ $23.40/hr.) Variable overhead Standard (0.5 hr. @ $6/hr.) Actual Total Actual cost: Split cost: Standard Units Costs $ $ $19 $12 $3 $34 Total Actual Costs $42,840 22,698 Assume that the 4,200 lb. of materials purchased were all used in producing the 2,000 completed units. Determine the materials price and efficiency variances, labor rate and efficiency variances, and variable overhead spending and efficiency variances. Materials Variances 6,200 $71,738
The direct labor rate variance is calculated by multiplying the standard hours that should have been worked for the actual output by the difference between the standard labor rate and the actual labor rate. O True O False
Complete the standard cost variance analysis
H1. Answer b please
Required information [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $4.00 per pound) Direct labor (1.8 hours @ $12.00 per hour) $ 12.00 21.60 33.30 Overhead (1.8 hours @ $18.50 per hour) Standard cost per unit $ 66.90 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factory's capacity of 20,000 units per month. Following are the company's budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 135,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 70,000 Depreciation-Machinery Taxes and insurance 16,000 Supervisory salaries 254,500 Total fixed overhead costs 364,500
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