Skysong Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM andDL usage and price expectations.Direct materialsDirect laborVariable-MOH(a)11 square yards per unit1.3 DL hours per unit1.3 DL hours per unitThroughout the year, Skysong used 4,095 DL hours in the process of making 3,250 tents. The company had originally planned toproduce and sell 2,950 tents. Its actual variable-MOH costs totaled $10,852 for the year.Determine Skysong's variable-MOH price and efficiency variances. Also identify whether the company's variable-MOH costswere under-or overapplied, and by how much.Variable-MOH price varianceVariable-MOH$Variable-MOH efficiency variance $@ $5/square yard@$14/DL hour@$2.60/DL hour$

The variance is the difference between the actual data and standard output of the production. The…

Answered: Skysong Corp. supplies its customers…

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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Summer Enterprises produces "Breeze" and "Storm" cooling fans. Selected data related to each product is as follows: Breeze Storm Sales price per unit $200 $300 Direct materials per unit $60 $70 Direct labour per unit $30 $35 Variable overhead per unit $10 $15 Direct labour hours per unit 2 There is a maximum of 24,000 direct labour hours available each year.
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Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials ? $ 4.00 per yard $ ? Direct labor ? ? ? Variable manufacturing overhead ? $ 2 per direct labor-hour ? Total standard cost per unit $ ? Overhead is applied to production on the basis of direct labor-hours. During March, 700 backpacks were manufactured and sold. Selected information relating to the month’s production is given below: Materials Used Direct Labor Variable Manufacturing Overhead Total standard cost allowed* $ 11,200 $ 10,500 $ 2,100 Actual costs incurred $ 8,925 ? $ 4,032 Materials price variance ? Materials quantity variance $ 700 U Labor rate variance ? Labor efficiency variance ? Variable overhead rate variance ? Variable overhead efficiency variance ? *For…
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Vikram
A VACUUM MANAUFACTUER HAS PREPARED THE FOLLOWING HAS THE FOLLOWING COST DATA FOR MANUFACTURING ONE OF ITS ENGINE COMPONENTS BASED ON THE ANNUAL PRODUCTION OF 50,000 UNITS DIRECT MATERIALS $75,000 DIRECT LABOR $100,000 TOTAL $175,000 IN ADDITION, VARIABLE FACTORY OVERHEAD IS APPLIED AT $7.50 PER UNIT. FIXED FACTORY OVERHEAD IS APPLIED AT 150% OF DIRECT LABOUR COST PER UNIT. THE VACUUM SELLS FOR $150 EACH. A THIRD PARTY HAS OFFERED TO MAKE THE ENGINES FOR $60 PER UNIT. 75% OF THE FIXED FACTORY OVERHEAD, WHICH REPRESENTS EXECUTIVE SALARIES, RENT, DEPRECIATION, AND TAXES, CONTINUES REGARDLESS OF DECISION. sHOULD THE COMPANY MAKE OR BUY THE ENGINES?

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