The Clark Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow: Labour rate variance$657.50 unfavourableLabour efficiency variance$1,075favourableVariable overhead efficiency variance$350 favourableNumber of units produced11,000Standard labour rate per direct labour hour$21.50Standard variable overhead rate per direct labour hour$7Actual labour hours used13,150Actual variable manufacturing overhead costs$93,500 What are the standard hours allowed to make one unit of finished product?What was the total standard cost for variable overhead for May?What was the total standard cost for direct labour for May?

Answered: The Clark Company makes a single…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 58E: At the beginning of the year, Lopez Company had the following standard cost sheet for one of its...

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The Clark Company makes a single product and uses standard costing. Some data concerning this product for the month of May follow:

Labour rate variance	$657.50 unfavourable
Labour efficiency variance	$1,075favourable
Variable overhead efficiency variance	$350 favourable
Number of units produced	11,000
Standard labour rate per direct labour hour	$21.50
Standard variable overhead rate per direct labour hour	$7
Actual labour hours used	13,150
Actual variable manufacturing overhead costs	$93,500

What are the standard hours allowed to make one unit of finished product?

What was the total standard cost for variable overhead for May?

What was the total standard cost for direct labour for May?

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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