Sheffield Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2020, 10,500 sults were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,500 direct labor hours. All materials purchased were used. Cost Element Standard (per unit) Actual Direct 9 yards at $4.50 per yard $419,320 for 95,300 yards ($4.40 per yard) materials Direct labor 1.10 hours at $14.00 per hour $173,745 for 12,150 hours ($14.30 per hour) Overhead 1.10 hours at $6.30 per hour (fixed $3.70; variable $2.60) $49.100 fixed overhead $37,500 variable overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $53,650, and budgeted variable overhead was $37,700. (a) Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round per unit values to 2 decimal places, eg. 52.75 and final answers to O decimal places, e.g. 52.) (1) Total materials variance Favorable Materials price variance $ 9530 Favorable # Materials quantity variance $ (2) Total labor variance $ Labor price variance Labor quantity variance $ (b) Compute the total overhead variance. Total overhead variance $ # :
Sheffield Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2020, 10,500 sults were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,500 direct labor hours. All materials purchased were used. Cost Element Standard (per unit) Actual Direct 9 yards at $4.50 per yard $419,320 for 95,300 yards ($4.40 per yard) materials Direct labor 1.10 hours at $14.00 per hour $173,745 for 12,150 hours ($14.30 per hour) Overhead 1.10 hours at $6.30 per hour (fixed $3.70; variable $2.60) $49.100 fixed overhead $37,500 variable overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $53,650, and budgeted variable overhead was $37,700. (a) Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round per unit values to 2 decimal places, eg. 52.75 and final answers to O decimal places, e.g. 52.) (1) Total materials variance Favorable Materials price variance $ 9530 Favorable # Materials quantity variance $ (2) Total labor variance $ Labor price variance Labor quantity variance $ (b) Compute the total overhead variance. Total overhead variance $ # :
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:Sheffheld Clothlers is a small company that manufactures tall-men's suits. The company has used a standard cost
accounting system. In May 2020, 10,500 sults were produced. The following standard and actual cost data applied to
the month of May when normal capacity was 14,500 direct labor hours. All materials purchased were used.
Cost Element
Standard (per unit)
Actual
Direct
9 yards at $4.50 per yard
$419.320 for 95,300 yards ($4.40 per yard)
materials
$173,745 for 12,150 hours ($14.30 per
hour)
Direct labor
1.10 hours at $14.00 per hour
1.10 hours at $6.30 per hour (fixed $3.70;
variable $2.60)
$49,100 fixed overhead $37,500 variable
Overhead
overhead
Overhead is appled on the basls of direct labor hours. At normal capacity, budgeted fixed overhead costs were
$53,650, and budgeted varlable overhead was $37,700.
(a)
Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round per unit values to 2 decimal places,
eg. 52.75 and final answers to O decimal places, eg. 52)
(1) Total materlals varlance
Favorable
Materlals price varlance
%24
9530
Favorable
Materials quantity variance
%24
(2)
Total labor varlance
%24
Labor price variance
Labor quantity varlance
(b)
Compute the total overhead variance.
Total overhead variance
%24
%24
%24
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