The River Plant of Carlisle, Incorporated produces a particular metal fixture used in aerospace and maritime industries. The following information is available for the last operating month: The plant produced and sold 28,520 fixtures for $72 each. Budgeted production was 30,000 fixtures. Standard variable costs per fixture follow: Direct materials: 4 pounds at $4 $ 16.00 Direct labor: 0.1 hours at $40 4.00 Variable production overhead: 0.4 machine-hours at $20 per hour 8.00 Total variable costs $ 28.00 Fixed production overhead costs: Monthly budget $814,000 Fixed overhead is applied at the rate of $30 per fixture. Actual production costs: Direct materials purchased and used: 106,000 pounds at $4.30 $ 455,800 Direct labor: 2,830 hours at $43.00 121,690 Variable overhead: 12,000 machine-hours at $19.50 per hour 234,000 Fixed overhead 847,000 Required: a. Prepare a cost variance analysis for each variable cost for the River Plant. b. Prepare a fixed overhead cost variance analysis. c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are closed to Cost of Goods Sold at the end of the operating period
The River Plant of Carlisle, Incorporated produces a particular metal fixture used in aerospace and maritime industries. The following information is available for the last operating month: The plant produced and sold 28,520 fixtures for $72 each. Budgeted production was 30,000 fixtures. Standard variable costs per fixture follow: Direct materials: 4 pounds at $4 $ 16.00 Direct labor: 0.1 hours at $40 4.00 Variable production overhead: 0.4 machine-hours at $20 per hour 8.00 Total variable costs $ 28.00 Fixed production overhead costs: Monthly budget $814,000 Fixed overhead is applied at the rate of $30 per fixture. Actual production costs: Direct materials purchased and used: 106,000 pounds at $4.30 $ 455,800 Direct labor: 2,830 hours at $43.00 121,690 Variable overhead: 12,000 machine-hours at $19.50 per hour 234,000 Fixed overhead 847,000 Required: a. Prepare a cost variance analysis for each variable cost for the River Plant. b. Prepare a fixed overhead cost variance analysis. c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are closed to Cost of Goods Sold at the end of the operating period
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The River Plant of Carlisle, Incorporated produces a particular metal fixture used in aerospace and maritime industries. The following information is available for the last operating month:
The plant produced and sold 28,520 fixtures for $72 each. Budgeted production was 30,000 fixtures.
Standard variable costs per fixture follow:
| Direct materials: 4 pounds at $4 | $ 16.00 |
|---|---|
| Direct labor: 0.1 hours at $40 | 4.00 |
| Variable production |
8.00 |
| Total variable costs | $ 28.00 |
Fixed production overhead costs:
Monthly budget $814,000
Fixed overhead is applied at the rate of $30 per fixture.
Actual production costs:
| Direct materials purchased and used: 106,000 pounds at $4.30 | $ 455,800 |
|---|---|
| Direct labor: 2,830 hours at $43.00 | 121,690 |
| Variable overhead: 12,000 machine-hours at $19.50 per hour | 234,000 |
| Fixed overhead | 847,000 |
Required:
a. Prepare a cost
b. Prepare a fixed overhead cost variance analysis.
c. (Appendix) Prepare the
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