Robinwood Fixtures manufactures two products, K4 and X7. The company prepares its master budget on the basis of standard costs. The following data are for September: Standards Direct materials Direct labor Variable overhead (per direct labor-hour) Fixed overhead (per month) Expected activity (direct labor-hours) Actual results Direct material (purchased and used) Direct labor Variable overhead Fixed overhead Units produced (actual) Direct materials Direct labor Variable overhead Fixed overhead Price Variance K4 Efficiency Variance 0.75 pounds at $8.60 per pound 1.25 hours at $26.60 per hour $ 21.80 $ 417,120 17,380 K4 10,600 pounds at $8.00 per pound. 14,830 hours at $26.90 per hour $ 343,060 $ 389,740 12,260 units Required: a. Prepare a variance analysis for each variable cost for each product. b. Prepare a fixed overhead variance analysis for each product. Note: For all requirements, Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Production Volume Variance Price Variance X7 1 pound at $9.20 per pound 1.50 hours at $30 per hour $ 23.60 $ 494,130 23,530 X7 14,230 pounds at $9.50 per pound 22,330 hours at $33.20 per hour $ 467,212 $ 491,320 14,530 units Efficiency Variance Production Volunte Variance
Robinwood Fixtures manufactures two products, K4 and X7. The company prepares its master budget on the basis of standard costs. The following data are for September: Standards Direct materials Direct labor Variable overhead (per direct labor-hour) Fixed overhead (per month) Expected activity (direct labor-hours) Actual results Direct material (purchased and used) Direct labor Variable overhead Fixed overhead Units produced (actual) Direct materials Direct labor Variable overhead Fixed overhead Price Variance K4 Efficiency Variance 0.75 pounds at $8.60 per pound 1.25 hours at $26.60 per hour $ 21.80 $ 417,120 17,380 K4 10,600 pounds at $8.00 per pound. 14,830 hours at $26.90 per hour $ 343,060 $ 389,740 12,260 units Required: a. Prepare a variance analysis for each variable cost for each product. b. Prepare a fixed overhead variance analysis for each product. Note: For all requirements, Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Production Volume Variance Price Variance X7 1 pound at $9.20 per pound 1.50 hours at $30 per hour $ 23.60 $ 494,130 23,530 X7 14,230 pounds at $9.50 per pound 22,330 hours at $33.20 per hour $ 467,212 $ 491,320 14,530 units Efficiency Variance Production Volunte Variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Robinwood Fixtures manufactures two products, K4 and X7. The company prepares its master budget on the basis of standard costs.
The following data are for September:
Standards
Direct materials
Direct labor
Variable overhead (per direct labor-hour)
Fixed overhead (per month)
FLACO
Expected activity (direct labor-hours)
Actual results
Direct material (purchased and used)
Direct labor
Variable overhead
Fixed overhead
Units produced (actual)
Direct materials
Direct labor
Variable overhead
Fixed overhead
Price Variance
K4
Efficiency Variance
0.75 pounds at $8.60 per pound
1.25 hours at $26.60 per hour
$ 21.80
$ 417,120
17,380
10,600 pounds at $8.00 per pound
14,830 hours at $26.90 per hour
$ 343,060
$ 389,740
12,260 units
Required:
a. Prepare a variance analysis for each variable cost for each product.
b. Prepare a fixed overhead variance analysis for each product.
Note: For all requirements, Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for
favorable, or "U" for unfavorable. If there is no effect, do not select either option.
K4
Production Volume
Variance
Price Variance
X7
1 pound at $9.20 per pound
1.50 hours at $30 per hour
$ 23.60
$ 494,130
23,530
14,230 pounds at $9.50 per pound
22,330 hours at $33.20 per hour
$ 467,212
$ 491,320
14,530 units
X7
Efficiency Variance
Production Voluinee
Variance
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