Standard Costs and VariancesEXERCISE 10–2 Direct Labor Variances LO10-2codeSkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company'sproducts is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During themost recent week, the company prepared 4,000 of these meals using 960 direct labor-hours. Thecompany paid its direct labor workers a total of $19,200 for this work, or $20.00 per hour.According to the standard cost card for this meal, it should require 0.25 direct labor-hours ata cost of $19.75 per hour.Required:1.What is the standard labor-hours allowed (SH) to prepare 4,000 meals?What is the standard labor cost allowed (SH × SR) to prepare 4,000 meals?What is the labor spending variance?2.3.4.What is the labor rate variance and the labor efficiency variance?rhead Variances LO10-3merchants. The company main-

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Answered: Standard Costs and Variances EXERCISE…

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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10-3
Variable Costing, Absorption Costing During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,000 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,800 scoops. Fixed overhead was applied at $0.75 per unit produced. Fixed overhead was underapplied by $2,500. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year's operations are as follows (on an absorption-costing basis): Sales (38,800 units @ $20) $776,000 Less: Cost of goods sold 546,460 Gross margin $229,540 Less: Selling and administrative expenses (all fixed) 185,500 Operating income $ 44,040 Required: Question Content Area 1. Calculate the cost of the firm's ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar.$fill in the blank…
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Question 3 Owen plc manufactures one product, and the entire product is sold as soon as it is produced. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for a product is as follows. Materials (4 Kg at £4 per Kg) Labour (4 Hours at £5 per hr) Variable overheads (5 hrs at £2 per hr) Fixed overheads (6 hrs at £3 per hr) Budgeted selling price is £80 per unit Budgeted production Budgeted sales There is no opening inventory The actual results are as follows: Sales: 8,400 units for £613,200 Production: 9,900 units Actual costs: Materials (35,464 kg): £163,455 Labour: £ 234,515 Variable overheads: £97,348 Fixed overheads: £ 144,074 £ per Unit 16 20 10 18 £64 8.900 units 8,200 units Required: a) Prepare a flexed budget and calculate the total variances b) Using the data, analyse each of the cost variances: Materials; Labour; Variable Overheads and; Fixed Overheads c) Using data, calculate the Sales price variance and the Sales…
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Item 3 Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 6 microns per toy at $0.32 per micron Direct labor: 1.3 hours per toy at $6.70 per hour During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows: Direct materials: 73,000 microns were purchased at a cost of $0.30 per micron. 32,500 of these microns were still in inventory at the end of the month. Direct labor: 7,420 direct labor-hours were worked at a cost of $52,682. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price…
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64 Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards for materials and labor: Leather (3 strips @ $4) $12.00 Direct labor (0.75 hr. @ $12) 9.00 Total prime cost $21.00 During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 300,500 strips at $3.30 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 80,000 hours at $14.00 per hour. Required: 1. Break down the total variance for materials into a price variance and a usage variance using the columnar and formula approaches. Enter favorable values as negative numbers and unfavorable values as positive numbers. Price variance F or U Usage variance F or U Total variance F or U 2. CONCEPTUAL CONNECTION Suppose the Boise plant manager investigates the materials variances and is told by the purchasing manager that…
86 Finch Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Finch uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Direct materials Direct labor Category Unit level Batch level Product level Facility level Total Estimated Cost $ 24,000 47,000 87,500 270,000 $ 428,500 Model 2M Model DS $ 10.50 13.00 $ 20.50 29.00 Cost Driver Number of units Number of setups Number of TV commercials Number of machine hours Amount of Cost Driver ZM: 2,450 units; DS: 9,550 units ZM: 25 setups; DS: 25 setups ZM: 14; DS: 11 ZM: 500 hours; DS: 1,000 hours Finch's facility has the capacity to operate 4,500 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $129 and for DS is $80. If Finch sold all of its products at the market prices, what was its profit or loss for the previous…

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