Smartsets manufactures headphone cases. During September 2024, the company produced and sold 105,000 cases and recorded the following cost data: E (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials cost variance %3! Direct labor cost variance

Smartsets manufactures headphone cases. During September 2024, the company produced and sold 105,000 cases and recorded the following cost data: E (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials cost variance %3! Direct labor cost variance

Name: Smartsets manufactures headphone cases. During September 2024, the co
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Description: Smartsets manufactures headphone cases. During September 2024, the company produced and sold 105,000 cases and recorded the following cost data:E (Click the icon to view the cost data.)Read the requirements.Requirement 1. Compute the cost and effici

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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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

Smartsets manufactures headphone cases. During September 2024, the company produced and sold 105,000 cases and recorded the following cost data:
E (Click the icon to view the cost data.)
Read the requirements.
Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor.
Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or
unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)
Formula
Variance
Direct materials cost variance
Direct labor cost variance
%3D

Data Table
Direct Materials
2 parts
$0.15 per part
Direct Labor
0.02 hours
15.00 per hour
Variable Manufacturing Overhead
Fixed Manufacturing Overhead ($28,500 for static budget volume of 95,000
units and 1,900 hours, or $15 per hour)
0.02 hours
11 per hour
Actual Cost Information
Direct Materials
(207,000 parts @ S0.20 per part)
S 41.400
Direct Labor
(1,600 hours @ $15.10 per hour)
24,160
Variable Manufacturing Overhead
8,000
Fixed Manufacturing Overhead
25,000
Print
Done

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