The Greenspace Company started busi- ness on January 1, 2017. The company adopted a standard costing system for the production of ergonomic backpacks. Greenspace chose direct labor as the application base for overhead and decided to use the proration method to account for variances at year-end. In 2017, Greenspace expected to make and sell 160,000 backpacks; each was budgeted to use 2 yards of fabric and require 0.5 hours of direct labor work. The company expected to pay $2 per yard for fabric and compensate workers at an hourly wage of $12. Greenspace has no variable overhead costs, but budgeted $800,000 for fixed manufacturing overhead in 2017. In 2017, Greenspace actually made 180,000 backpacks and sold 144,000 of them for a total revenue of $2,592,000. The costs incurred were as follows: Fixed manufacturing costs Fabric costs (370,000 yards bought and used) Direct manufacturing labor costs (100,000 hours) $ 875,000 $ 758,500 $1,260,000

The Greenspace Company started busi- ness on January 1, 2017. The company adopted a standard costing system for the production of ergonomic backpacks. Greenspace chose direct labor as the application base for overhead and decided to use the proration method to account for variances at year-end. In 2017, Greenspace expected to make and sell 160,000 backpacks; each was budgeted to use 2 yards of fabric and require 0.5 hours of direct labor work. The company expected to pay $2 per yard for fabric and compensate workers at an hourly wage of $12. Greenspace has no variable overhead costs, but budgeted $800,000 for fixed manufacturing overhead in 2017. In 2017, Greenspace actually made 180,000 backpacks and sold 144,000 of them for a total revenue of $2,592,000. The costs incurred were as follows: Fixed manufacturing costs Fabric costs (370,000 yards bought and used) Direct manufacturing labor costs (100,000 hours) $ 875,000 $ 758,500 $1,260,000

Name: Compute Direct manufacturing labor efficiency variance for 2017 The Gr
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Description: Compute Direct manufacturing labor efficiency variance for 2017 The Greenspace Company started busi-ness on January 1, 2017. The company adopted a standard costing system for the production of ergonomicbackpacks. Greenspace chose direct labor as the

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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M8(7)
The variable overhead spending variance is most effective in measuring: O how well overhead spending matches the targets set in the original budget at the beginning of the year. O the efficiency with which the activity base was utilized in production. O the excessive use of overhead resources. O the utilization of plant facilities.
H1. Answer b please
4. Compute the Material Price variance 5. Compute the Material Quantity variance 6. Compute the Total Labor variance 7. Compute the Labor Price variance 8. Compute the Labor Quantity variance 9. Compute the Total Manufacturing Overhead variance 10. Which variance(s) would be the responsibility of the Production Manager? 11. Which variance(s) would be the responsibility of the Purchasing Manager? Show all calculations for each item step-by-step
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Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places and round your answers to the nearest dollar, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct materials quantity variance Direct labor time variance
The labor efficiency variance is the difference between the actual quantity of hours at the standard rate and the standard direct labor hours at the standard rate. A. True B. False
Assume the labor rate variance is $400 unfavorable and the labor spending variance is $200 unfavorable. Given these assumptions, which of the following statements is true? Multiple Choice The labor efficiency variance must be $600 favorable. The labor efficiency variance must be $600 unfavorable. The labor efficiency variance must be $200 favorable. The labor efficiency variance must be $200 unfavorable.
Based on the following, what is the total direct materials variance? Total Product Cost Flexible Budget Variance (a) Total Direct Materials Variance (b) Total Direct Labor Variance Total Manufacturing Overhead Variance (d) Direct Materials Direct Materials Direct Labor Direct Labor Total Variable Total Fixed Cost Efficiency Efficiency Variance Variance Cost Variance Variance Overhead Variance Overhead Variance $300 F $150 U $450 U $500 F (e) Variable Overhead Cost Variance $350 U Variable Overhead Efficiency Variance $425 F Fixed Overhead Cost Variance $650 F OA. $300 U OB. $150 U OC. $150 F OD. $300 F
Total Flexible Budget Product Cost Variance (a) Total Direct Total Direct Total Manufacturing Materials Variance Labor Variance Overhead Variance (b) (c) (d) Direct Materials Direct Materials Direct Labor Direct Labor Total Variable Total Fixed Cost Variance Efficiency Variance Cost Variance Efficiency Variance Overhead Variance Overhead Variance $540 F $155 U $180 U $425 F (e) (f) Variable Overhead Variable Overhead Fixed Overhead Cost Variance Efficiency Variance Cost Variance $225 U $575 F $110 F