general accounting quetion Summit Manufacturing produces a component with the following standard costs:ItemStandard Quantity/Hours Standard Price/RateDirect materials 2.1 pounds$8.50 per poundDirect labor0.8 hours$22.00 per hour$4.50 per hourVariable overhead 0.8 hoursDuring May 2024, the company:• Produced 3,800 unitsUsed 8,100 pounds of direct materials• Used 3,180 direct labor hours••Purchased 9,000 pounds of materials at $8.30 per poundPaid actual labor rate of $22.50 per hour•Had actual variable overhead rate of $4.40 per hourVariable overhead is applied based on direct labor hours. Direct materials purchase variance iscomputed at time of purchase.Calculate the labor efficiency variance for May 2024.

Step 1: Define Labor Efficiency VarianceThe labor efficiency variance measures the difference…

Answered: Summit Manufacturing produces a…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 14E

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Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
Chefs Company developed the following standard costs for its product for 2022: CHEFS COMPANY Standard Cost Card Cost Elements Standard Quantity × Standard Price/Rate = Standard Cost Direct materials 4 pounds $ 10 $40 Direct labor 2 hours 20 40 Variable overhead 2 hours 8 16 Fixed overhead 2 hours 4 8…
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Han Products manufactures 21,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials$ 3.50Direct labor9.00Variable manufacturing overhead2.50Fixed manufacturing overhead9.00Total cost per part$ 24.00 An outside supplier has offered to sell 21,000 units of part S-6 each year to Han Products for $20 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $71,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required: What is the financial advantage (disadvantage) of accepting the outside supplier’s offer?
Han Products manufactures 50,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is asfollows:Direct materials $ 5.50Direct labour 11.50Variable overhead 4.50Fixed overhead 10.20Total cost per part $31.70An outside supplier has offered to sell 43,500 units of part S-6 each year to Han Products for $28.00 per part. If Han Products accepts this offer, thefacilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $100,000. However, Han Products hasdetermined that 30% of the fixed overhead being applied to part S-6 will be avoided if part S-6 is purchased from the outside supplier. Required:1. What is the net dollar advantage or disadvantage of accepting the outside supplier’s offer? (Round "Total costs" and final answer to the nearestwhole dollar amount.)
ABC Company began operations on September 1, 2022. For its first month of operations, ABC Company set the following standards for each unit of its single product: standard price/rate $6.25 per pound $14.00 per hour $11.30 per hour ABC Company reported the following information for September: 1. 28,000 pounds of direct materials were purchased at a cost of $7.10 per pound. direct materials direct labor variable overhead 2. 56,000 direct labor hours were worked at a total cost of $852, 440. The variable overhead cost for the month totaled $620,000. 6,800 units were produced, At September 30, ABC Company had 4,300 pounds of direct materials on hand. 3. standard quantity/hours 4 pounds 8 hours 8 hours 5. calculate the direct material quantity variance for September. If the variance is favorable, place a minus sign in front of your answer (1.e., -5000), If the variance is unfavorable, simply enter your answer as a number (1.e., 5000).
TikTok Electronics manufactures an aluminium fibre tripod model “TRI-X” which sells for $1,600. The production cost computed per unit under traditional costing for each model in 2019 was as follows:Traditional CostingDirect MaterialsDirect Labour ($20/hour) Manufacturing overhead ($38 per DLH) Total per unit costTRIX$700 $120 $228 $1, 048In 2019, TikTok Electronics manufactured 26,000 units of TRI-X. Under traditional costing, the gross profit on TRI-X was $552 ($1,600-$1,048). Management is considering phasing out TRI- X as it has continuously failed to reach the gross profit target of $600. Before finalizing its decision, management asks TikTok Electronics management accountant to prepare an analysis using activity-based costing (ABC). The management accountant accumulates the following information about overhead for the year ended December 31, 2019.Activity Cost Pools PurchasingMachine setupsMachining Quality ControlCost DriversNumber of orders Number of setups Machine hours Number…
Under absorption costing
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Under absorption costing
please answer both A and B
TikTok Electronics manufactures an aluminium fibre tripod model “TRI-X” which sells for$1,600. The production cost computed per unit under traditional costing for each model in2019 was as follows:Traditional Costing TRIXDirect Materials $700Direct Labour ($20/hour) $120Manufacturing overhead ($38 per DLH) $228Total per unit cost $1, 048In 2019, TikTok Electronics manufactured 26,000 units of TRI-X. Under traditional costing, the gross profit on TRI-X was $552 ($1,600-$1,048). Management is considering phasing out TRIX as it has continuously failed to reach the gross profit target of $600. Before finalizing its decision, management asks TikTok Electronics management accountant to prepare an analysis using activity-based costing (ABC). The management accountant accumulates the following information about overhead for the year ended December 31, 2019.Required:1. Calculate the activity rates for each of the overhead items using the four cost drivers. 2. Using the rates in (1) determine…

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