Superior produced 1,000 units of finished product in 2018. Direct materials cost variance $115 U Direct materials efficiency variance 840 F Direct labor cost variance 700 F Direct labor efficiency variance 6,450 F Variable overhead cost variance 1,000 U Variable overhead efficiency variance 1,000 F Fixed overhead cost variance 700 U Fixed overhead volume variance 2,600 F Standards: 3 yards of cloth per unit at $1.20 per yard 2 direct labor hours per unit at $10.75 per hour Overhead allocated at $5.00 per direct labor hour Actual: 2,300 yards of cloth were purchased at $1.25 per yard Employees worked 1,400 hours and were paid $10.25 per hour Actual variable overhead was $1,600 Actual fixed overhead was $6,500 Record the overhead allocated to Work-in-Process Inventory. Date Accounts and Explanation Debit Credit
Superior produced 1,000 units of finished product in 2018. Direct materials cost variance $115 U Direct materials efficiency variance 840 F Direct labor cost variance 700 F Direct labor efficiency variance 6,450 F Variable overhead cost variance 1,000 U Variable overhead efficiency variance 1,000 F Fixed overhead cost variance 700 U Fixed overhead volume variance 2,600 F Standards: 3 yards of cloth per unit at $1.20 per yard 2 direct labor hours per unit at $10.75 per hour Overhead allocated at $5.00 per direct labor hour Actual: 2,300 yards of cloth were purchased at $1.25 per yard Employees worked 1,400 hours and were paid $10.25 per hour Actual variable overhead was $1,600 Actual fixed overhead was $6,500 Record the overhead allocated to Work-in-Process Inventory. Date Accounts and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Superior produced 1,000 units of finished product in 2018.
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Direct materials cost variance
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$115
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U
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Direct materials efficiency variance
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840
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F
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Direct labor cost variance
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700
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F
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Direct labor efficiency variance
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6,450
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F
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Variable
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1,000
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U
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Variable overhead efficiency variance
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1,000
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F
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Fixed overhead cost variance
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700
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U
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Fixed overhead volume variance
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2,600
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F
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Standards:
3 yards of cloth per unit at $1.20 per yard
2 direct labor hours per unit at $10.75 per hour
Overhead allocated at $5.00 per direct labor hour
Actual:
2,300 yards of cloth were purchased at $1.25 per yard
Employees worked 1,400 hours and were paid $10.25 per hour
Actual variable overhead was $1,600
Actual fixed overhead was $6,500
Record the overhead allocated to Work-in-Process Inventory.
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Date
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Accounts and Explanation
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Debit
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