Sunland Irrigation, Inc. is known throughout the world for its H2O-X high-capacity water pump, used in irrigation systems. The pump’s standard cost is as follows. The company’s predetermined fixed overhead rate is based on an expected capacity of 100,000 direct labor hours per month. Standard Price Standard Quantity Standard Cost Direct materials $7 per pound 14 pounds $98 Direct labor $10 per DLH 4 DLH 40 Variable overhead $9 per DLH 4 DLH 36 Fixed overhead $4 per DLH 4 DLH 16 $190 During the month of September, the company produced 21,860 of the 25,000 pumps that had been scheduled for production in the budget. The company used 356,350 pounds of material during September. The direct labor payroll for the month was $773,200 for 92,900 direct labor hours. Variable overhead costs were $825,800; fixed overhead costs were $363,200. The company’s purchasing agent signed a new supply contract that resulted in purchases of 464,500 pounds of direct materials at a total price of $3,065,700. Calculate Sunland’ direct materials, direct labor, and overhead variances for September. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,725. If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Direct materials price variance $enter a dollar amount rounded to 0 decimal places select an option FavorableUnfavorableNot Applicable Direct materials quantity variance $enter a dollar amount rounded to 0 decimal places select an option UnfavorableFavorableNot Applicable Direct labor rate variance $enter a dollar amount rounded to 0 decimal places select an option FavorableNot ApplicableUnfavorable
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Sunland Irrigation, Inc. is known throughout the world for its H2O-X high-capacity water pump, used in irrigation systems. The pump’s
|
Standard
Price |
Standard
Quantity |
Standard
Cost |
|||||
|---|---|---|---|---|---|---|---|
|
Direct materials
|
$7 per pound | 14 pounds | $98 | ||||
|
Direct labor
|
$10 per DLH | 4 DLH | 40 | ||||
|
Variable overhead
|
$9 per DLH | 4 DLH | 36 | ||||
|
Fixed overhead
|
$4 per DLH | 4 DLH | 16 | ||||
| $190 |
During the month of September, the company produced 21,860 of the 25,000 pumps that had been scheduled for production in the budget. The company used 356,350 pounds of material during September. The direct labor payroll for the month was $773,200 for 92,900 direct labor hours. Variable overhead costs were $825,800; fixed overhead costs were $363,200. The company’s purchasing agent signed a new supply contract that resulted in purchases of 464,500 pounds of direct materials at a total price of $3,065,700.
Calculate Sunland’ direct materials, direct labor, and overhead variances for September. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,725. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)
|
Direct materials price variance
|
$enter a dollar amount rounded to 0 decimal places | select an option FavorableUnfavorableNot Applicable | ||
|---|---|---|---|---|
|
Direct materials quantity variance
|
$enter a dollar amount rounded to 0 decimal places | select an option UnfavorableFavorableNot Applicable | ||
|
Direct labor rate variance
|
$enter a dollar amount rounded to 0 decimal places | select an option FavorableNot ApplicableUnfavorable | ||
|
Direct labor efficiency variance
|
$enter a dollar amount rounded to 0 decimal places | select an option FavorableNot ApplicableUnfavorable | ||
|
Variable overhead spending variance
|
$enter a dollar amount rounded to 0 decimal places | select an option Not ApplicableUnfavorableFavorable | ||
|
Variable overhead efficiency variance
|
$enter a dollar amount rounded to 0 decimal places | select an option FavorableNot ApplicableUnfavorable | ||
|
Fixed overhead spending variance
|
$enter a dollar amount rounded to 0 decimal places | select an option UnfavorableNot ApplicableFavorable |
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