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 $ 20.60 $415,680 17,320 0.75 pounds at $7.40 per pound 1.25 hours at $25.40 per hour 10,000 pounds at $6.80 per pound 14,770 hours at $25.70 per hour $ 319,060 $ 383,740 K4 K4 12,140 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. Efficiency Variance Production Volume Variance 1 pound at $8.00 per pound 1.50 hours at $30 per hour $ 22.40 $ 492,870 23,470 14,170 pounds at $8.30 per pound 22,270 hours at $32.00 per hour $ 461,212 $ 490,360 14,470 units X7 Price Variance X7 Efficiency Variance Production Volume 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 $ 20.60 $415,680 17,320 0.75 pounds at $7.40 per pound 1.25 hours at $25.40 per hour 10,000 pounds at $6.80 per pound 14,770 hours at $25.70 per hour $ 319,060 $ 383,740 K4 K4 12,140 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. Efficiency Variance Production Volume Variance 1 pound at $8.00 per pound 1.50 hours at $30 per hour $ 22.40 $ 492,870 23,470 14,170 pounds at $8.30 per pound 22,270 hours at $32.00 per hour $ 461,212 $ 490,360 14,470 units X7 Price Variance X7 Efficiency Variance Production Volume Variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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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
$ 20.60
$415,680
17,320
0.75 pounds at $7.40 per pound.
1.25 hours at $25.40 per hour
$ 319,060
$ 383,740
K4
10,000 pounds at $6.80 per pound
14,770 hours at $25.70 per hour
K4
12,140 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.
Efficiency Variance
Production Volume
Variance
1 pound at $8.00 per pound
1.50 hours at $30 per hour
$22.40
$ 492,870
23,470
14,170 pounds at $8.30 per pound
22,270 hours at $32.00 per hour
$ 461,212
$ 490,360
14,470 units
X7
Price Variance
X7
Efficiency Variance
Production Volume
Variance
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