Concord Corporation manufactures a single product. The standard cost per unit of product is shown below.Direct materials–1 pound plastic at $6.00 per pound$ 6.00Direct labor-2.00 hours at $12.20 per hour24.40Variable manufacturing overhead15.00Fixed manufacturing overhead13.00Total standard cost per unit$58.40The predetermined manufacturing overhead rate is $14 per direct labor hour ($28.00 ÷ 2.00). It was computed from a mastermanufacturing overhead budget based on normal production of 10,000 direct labor hours (5,000 units) for the month. The masterbudget showed total variable costs of $75,000 ($7.50 per hour) and total fixed overhead costs of $65,000 ($6.50 per hour). Actualcosts for October in producing 3,400 units were as follows.Direct materials (3,600 pounds)$ 22,320Direct labor (6,650 hours)83,790Variable overhead66,638Fixed overhead30,462Total manufacturing costs$203,210 The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Rawmaterials inventories, therefore, can be ignored.(a)Compute all of the materials and labor variances.Total materials variance$Materials price variance$Materials quantity variance$Total labor variance$Labor price varianceLabor quantity variance(b)Compute the total overhead variance.Total overhead variance$%24%24%24

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Description: Concord Corporation manufactures a single product. The standard cost per unit of product is shown below.Direct materials–1 pound plastic at $6.00 per pound$ 6.00Direct labor-2.00 hours at $12.20 per hour24.40Variable manufacturing overhead15.00Fixed

Variance refers to the difference between the actual and the estimated results of the company.…

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The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. (a) Compute all of the materials and labor variances. Total materials variance $ Materials price variance Materials quantity variance Total labor variance Labor price variance 2$ Labor quantity variance 2$ (b) Compute the total overhead variance. Total overhead variance $ %24 %24 %24 %24

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. (a) Compute all of the materials and labor variances. Total materials variance $ Materials price variance Materials quantity variance Total labor variance Labor price variance 2$ Labor quantity variance 2$ (b) Compute the total overhead variance. Total overhead variance $ %24 %24 %24 %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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

Concord Corporation manufactures a single product. The standard cost per unit of product is shown below.
Direct materials–1 pound plastic at $6.00 per pound
$ 6.00
Direct labor-2.00 hours at $12.20 per hour
24.40
Variable manufacturing overhead
15.00
Fixed manufacturing overhead
13.00
Total standard cost per unit
$58.40
The predetermined manufacturing overhead rate is $14 per direct labor hour ($28.00 ÷ 2.00). It was computed from a master
manufacturing overhead budget based on normal production of 10,000 direct labor hours (5,000 units) for the month. The master
budget showed total variable costs of $75,000 ($7.50 per hour) and total fixed overhead costs of $65,000 ($6.50 per hour). Actual
costs for October in producing 3,400 units were as follows.
Direct materials (3,600 pounds)
$ 22,320
Direct labor (6,650 hours)
83,790
Variable overhead
66,638
Fixed overhead
30,462
Total manufacturing costs
$203,210

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw
materials inventories, therefore, can be ignored.
(a)
Compute all of the materials and labor variances.
Total materials variance
$
Materials price variance
$
Materials quantity variance
$
Total labor variance
$
Labor price variance
Labor quantity variance
(b)
Compute the total overhead variance.
Total overhead variance
$
%24
%24
%24

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