Tip Top Corp. produces a product that requires nine standard gallons per unit. The standard price is $8.5 per gallon. If 4,600 units required 42,200 gallons, which were purchased at $8.07 per gallon, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 55,000 actual direct labor hours and incurred $520,000 of actual manufacturing overhead costs. The Corporation had estimated that it would work 52,000 direct labor hours during the year and incur $468,000 of manufacturing overhead costs. The Corporation's manufacturing overhead cost for the year was: a. overapplied by $25,000. b. underapplied by $27,000. c. overapplied by $27,000. d. underapplied by $25,000.

Tip Top Corp. produces a product that requires nine standard gallons per unit. The standard price is $8.5 per gallon. If 4,600 units required 42,200 gallons, which were purchased at $8.07 per gallon, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Sawyer Manufacturing Corporation uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 55,000 actual direct labor hours and incurred $520,000 of actual manufacturing overhead costs. The Corporation had estimated that it would work 52,000 direct labor hours during the year and incur $468,000 of manufacturing overhead costs. The Corporation's manufacturing overhead cost for the year was: a. overapplied by $25,000. b. underapplied by $27,000. c. overapplied by $27,000. d. underapplied by $25,000.

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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