The Starr Company has established a standard cost system for the manufacture of a single consumer product, which is branded under the name Vinbit. The standard costs of producing one Vinbit are shown below: Standard Cost Card: Direct Materials: 20 pounds @ $.30 Direct Labor: 3 hours@ $15.00 $6.00 $45.00 At the beginning of the year, Starr Company established a monthly flexible overhead budgetas follows: Flexible OverheadBudget: Variable Charges - $.60 per direct labor hour Fixed Charges - $5,000.00per month Budgeted Volume – 10,000 direct labor hours The costs of operations to produce 4,500 Vinbits during May are stated below (therewere no initi inventories): Actual Costs: $34,100 Materials purchased:110,000 pounds @ $.31 Materials used: 105,000pounds Direct Labor: 13,750 hours @ $15.20 $209,000 $8,500 $6,000 Variable overhead incurred Fixed overhead incurred Required: 1. Prepare a calculation of the direct material price and quantity variances for the month of May. Variances are calculated as soon as possible. 2. Prepare a calculation of the direct labor wage rate and efficiency variances for the month of Мay.

The Starr Company has established a standard cost system for the manufacture of a single consumer product, which is branded under the name Vinbit. The standard costs of producing one Vinbit are shown below: Standard Cost Card: Direct Materials: 20 pounds @ $.30 Direct Labor: 3 hours@ $15.00 $6.00 $45.00 At the beginning of the year, Starr Company established a monthly flexible overhead budgetas follows: Flexible OverheadBudget: Variable Charges - $.60 per direct labor hour Fixed Charges - $5,000.00per month Budgeted Volume – 10,000 direct labor hours The costs of operations to produce 4,500 Vinbits during May are stated below (therewere no initi inventories): Actual Costs: $34,100 Materials purchased:110,000 pounds @ $.31 Materials used: 105,000pounds Direct Labor: 13,750 hours @ $15.20 $209,000 $8,500 $6,000 Variable overhead incurred Fixed overhead incurred Required: 1. Prepare a calculation of the direct material price and quantity variances for the month of May. Variances are calculated as soon as possible. 2. Prepare a calculation of the direct labor wage rate and efficiency variances for the month of Мay.

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Description: The Starr Company has established a standard cost system for the manufacture of a singleconsumer product, which is branded under the name Vinbit. The standard costs of producing oneVinbit are shown below:Standard Cost Card:Direct Materials: 20 pound

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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