Simpson Manufacturing has the following standard cost sheet for one of its products: Total Direct materials Direct labor 5 pounds at $2 per pound $10 2 hours at $25 per hour 50 Variable factory overhead 2 hours at $5 per hour 10 Fixed factory overhead 2 hours at $20 per hour Cost per unit 40 $110 The company uses a standard cost system and applies factory overhead cost based on direct labor hours and determines the factory overhead rate based on a practical capacity of 400 units of the product. Simpson has the following actual operating results for the year just completed: Units manufactured 390 Direct materials purchased and used 1,950 pounds $ 21,450 Direct labor incurred 900 hours 24,300 Variable factory overhead incurred 5,760 Fixed factory overhead incurred 15,800 Before closing the periodic accounts, the (standard cost) entries in selected accounts follow: Account Debit (total) Credit (total) Work-in-process inventory S 198,000 $ 149,640 Finished goods inventory 149,640 126,690 Cost of goods sold 126,690 3. Compute the following factory overhead cost variances using three-variance analysis: a. Overhead spending variance. b. Overhead efficiency variance. c. Fixed overhead production volume variance.

Simpson Manufacturing has the following standard cost sheet for one of its products: Total Direct materials Direct labor 5 pounds at $2 per pound $10 2 hours at $25 per hour 50 Variable factory overhead 2 hours at $5 per hour 10 Fixed factory overhead 2 hours at $20 per hour Cost per unit 40 $110 The company uses a standard cost system and applies factory overhead cost based on direct labor hours and determines the factory overhead rate based on a practical capacity of 400 units of the product. Simpson has the following actual operating results for the year just completed: Units manufactured 390 Direct materials purchased and used 1,950 pounds $ 21,450 Direct labor incurred 900 hours 24,300 Variable factory overhead incurred 5,760 Fixed factory overhead incurred 15,800 Before closing the periodic accounts, the (standard cost) entries in selected accounts follow: Account Debit (total) Credit (total) Work-in-process inventory S 198,000 $ 149,640 Finished goods inventory 149,640 126,690 Cost of goods sold 126,690 3. Compute the following factory overhead cost variances using three-variance analysis: a. Overhead spending variance. b. Overhead efficiency variance. c. Fixed overhead production volume variance.

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Description: Please provide answer in text (Without image) Simpson Manufacturing has the following standard cost sheet for one of its products:TotalDirect materials5 pounds at $2 per pound $10Direct labor2 hours at $25 per hour50Variable factory overhead 2 hours

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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