ADDITIONAL INFO: OVERHEAD- ACTUAL COSTSvariable overhead: 101,000fixed overhead: 68,000 OVERHEAD- STANDARD COSTS variable overhead- $12 per hour , 2 hours per unit.fixed overhead - 6 per hour , 2 hours per unit. ACTUAL UNITS MANUFATURED: 5,100 units Songsu Company is struggling to control costs. We are hired as consultants to determine why the company's actual costs exceedbudgeted costs. The Tableau Dashboard is provided for our analysis.8642 H0Rate Per HourHours Per Unit4 lbsPounds PerUnitDirect MaterialsStandard$20$15$10$5$08 hrs6 hrs4 hrs2 hrs0 hrs$6Price PerPound6 lbsFixed OverheadActualOverhead - Standard CostsPounds PerUnit$7Price PerPound6969Variable Overhead151050Standard2 hrsDirect LaborHours PerUnit$17Price PerHourVariable OverheadActual Units ManufacturedActual2.5 hrsHours PerUnitOverhead - Actual Costs$169,000$14Price PerHourFixed Overhead 邨+ableauAQ = Actual QuantitySQ = Standard QuantityAR= Actual RateSR Standard RateAP = Actual PriceSP Standard PriceAQActual Cost1. & 2. Compute the direct materials price variance and direct materials quantity variance. Indicate whether this cost variance isfavorable, unfavorable or no variance.XXActual Units ManufacturedAR$0$AQ00XX→SP0POSQStandard CostXSP

Direct material price variance = (AQ x SR) - (AQ x AR)…

Answered: Songsu Company is struggling to control…

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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Question

ADDITIONAL INFO:

OVERHEAD- ACTUAL COSTS

variable overhead: 101,000

fixed overhead: 68,000

OVERHEAD- STANDARD COSTS

variable overhead- $12 per hour , 2 hours per unit.

fixed overhead - 6 per hour , 2 hours per unit.

ACTUAL UNITS MANUFATURED: 5,100 units

Songsu Company is struggling to control costs. We are hired as consultants to determine why the company's actual costs exceed
budgeted costs. The Tableau Dashboard is provided for our analysis.
8
6
4
2 H
0
Rate Per Hour
Hours Per Unit
4 lbs
Pounds Per
Unit
Direct Materials
Standard
$20
$15
$10
$5
$0
8 hrs
6 hrs
4 hrs
2 hrs
0 hrs
$6
Price Per
Pound
6 lbs
Fixed Overhead
Actual
Overhead - Standard Costs
Pounds Per
Unit
$7
Price Per
Pound
69
69
Variable Overhead
15
10
5
0
Standard
2 hrs
Direct Labor
Hours Per
Unit
$17
Price Per
Hour
Variable Overhead
Actual Units Manufactured
Actual
2.5 hrs
Hours Per
Unit
Overhead - Actual Costs
$169,000
$14
Price Per
Hour
Fixed Overhead

邨+ableau
AQ = Actual Quantity
SQ = Standard Quantity
AR= Actual Rate
SR Standard Rate
AP = Actual Price
SP Standard Price
AQ
Actual Cost
1. & 2. Compute the direct materials price variance and direct materials quantity variance. Indicate whether this cost variance is
favorable, unfavorable or no variance.
X
X
Actual Units Manufactured
AR
$
0
$
AQ
0
0
X
X
→
SP
0
PO
SQ
Standard Cost
X
SP

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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