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Smead Manufacturing Company The Smead Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). At the beginning of 2024, Smead adopted the following standards for its manufacturing costs: Input Cost per Output Unit Direct materials 5 lb. at $4 per lb. $ 20.00 Direct manufacturing labor 4 hrs. at $16 per hr. 64.00 Manufacturing overhead: Variable $8 per DLH Fixed $9 per DLH Standard manufacturing cost per output unit 32.00 36.00 $152.00 The denominator level for total manufacturing overhead per month in 2024 is 37,000 direct manufacturing labor-hours. Smead's budget for January 2024 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 40,300 lb. at $3.80 per lb. 37,300 lb. 31,400 hrs. at $16.25 per hr. $650,000 7,600 output units

Smead Manufacturing Company The Smead Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). At the beginning of 2024, Smead adopted the following standards for its manufacturing costs: Input Cost per Output Unit Direct materials 5 lb. at $4 per lb. $ 20.00 Direct manufacturing labor 4 hrs. at $16 per hr. 64.00 Manufacturing overhead: Variable $8 per DLH Fixed $9 per DLH Standard manufacturing cost per output unit 32.00 36.00 $152.00 The denominator level for total manufacturing overhead per month in 2024 is 37,000 direct manufacturing labor-hours. Smead's budget for January 2024 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 40,300 lb. at $3.80 per lb. 37,300 lb. 31,400 hrs. at $16.25 per hr. $650,000 7,600 output units

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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. For the month of January 2024, compute the following variances, indicating whether each is
favorable (F) or unfavorable (U):
a. Direct materials price variance, based on purchases
b. Direct materials efficiency variance
c. Direct manufacturing labor price variance
d. Direct manufacturing labor efficiency variance
e. Total manufacturing overhead spending variance
f. Variable manufacturing overhead efficiency variance
g. Production-volume variance

Smead Manufacturing Company The Smead Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). At the beginning of 2024, Smead adopted the following standards for its manufacturing costs: Input Cost per Output Unit Direct materials 5 lb. at $4 per lb. $ 20.00 Direct manufacturing labor 4 hrs. at $16 per hr. 64.00 Manufacturing overhead: Variable $8 per DLH Fixed $9 per DLH Standard manufacturing cost per output unit 32.00 36.00 $152.00 The denominator level for total manufacturing overhead per month in 2024 is 37,000 direct manufacturing labor-hours. Smead's budget for January 2024 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 40,300 lb. at $3.80 per lb. 37,300 lb. 31,400 hrs. at $16.25 per hr. $650,000 7,600 output units
Transcribed Image Text:Smead Manufacturing Company The Smead Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). At the beginning of 2024, Smead adopted the following standards for its manufacturing costs: Input Cost per Output Unit Direct materials 5 lb. at $4 per lb. $ 20.00 Direct manufacturing labor 4 hrs. at $16 per hr. 64.00 Manufacturing overhead: Variable $8 per DLH Fixed $9 per DLH Standard manufacturing cost per output unit 32.00 36.00 $152.00 The denominator level for total manufacturing overhead per month in 2024 is 37,000 direct manufacturing labor-hours. Smead's budget for January 2024 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 40,300 lb. at $3.80 per lb. 37,300 lb. 31,400 hrs. at $16.25 per hr. $650,000 7,600 output units
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