To produce a unit of product A, 8 kg of raw material are required, the standard cost of which is NIS 10 per kg, and 3 hours of direct labor, which costs NIS 50 per hour. Indirect costs are charged on the basis of direct labor hours. In March 2015, the company planned to produce 12,000 units of product A. In practice, the company produced 10,000 units in March. The production of these units required 75,000 kg of raw material whose cost amounted to NIS 787,500 and 32,000 direct labor hours whose cost was NIS 1,664,000. What is the material quantity deviation? 30000 for good There is no correct answer 45000 negative 50000 for good 120000 negative

To produce a unit of product A, 8 kg of raw material are required, the standard cost of which is NIS 10 per kg, and 3 hours of direct labor, which costs NIS 50 per hour. Indirect costs are charged on the basis of direct labor hours. In March 2015, the company planned to produce 12,000 units of product A. In practice, the company produced 10,000 units in March. The production of these units required 75,000 kg of raw material whose cost amounted to NIS 787,500 and 32,000 direct labor hours whose cost was NIS 1,664,000. What is the material quantity deviation? 30000 for good There is no correct answer 45000 negative 50000 for good 120000 negative

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...

See similar textbooks

Similar questions

Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 40,000 units next year and Product L is expected to sell 8,000 units. A unit of either product requires 0.4 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $1,632,000. Required: 1. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost would be applied to each product? Compute both the overhead cost per unit and the total amount of overhead cost that would be applied to each product. (In other words, how much overhead cost is applied to a unit of Product H? Product L? How much overhead cost is applied in total to all the units of Product H? Product L?) 2. Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it…
Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Riggins estimated 9,500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: Standard Quantity Standard Price Direct materials 2.5 pounds $3 per pound Direct labor 0.6 hours $10 per hour During March 2022, the following activity was recorded by the company relating to the production of tybos: 1. The company produced 9,000 units during the month. 2. A total of 24,000 pounds of materials were purchased at a cost of $66,000. 3. A total of 24,000 pounds of materials were used in production. 4. 5,000 hours of labor were incurred during the month at a total wage cost of $55,000. Calculate the following variances for March for Riggins, Inc. Identify whether each variance is favorable or unfavorable.…
Chhom, Inc., manufactures and sells two products: Product F9 and Product U4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product F9 500 4 2,000 Product U4 1,000 2 2,000 Total direct labor-hours 4,000 The direct labor rate is $25.50 per DLH. The direct materials cost per unit is $274 for Product F9 and $222 for Product U4. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product F9 Product U4 Total Labor-related DLHs $ 31,900 2,000 2,000 4,000 Production orders orders 50,640 600 1,000 1,600 Order size MHs 103,200 3,300 2,600 5,900 $ 185,740 If the company allocates all of its overhead based on direct labor-hours using its…
The Parts Division of Mally Company makes Part XYZ, which it sells to outside companies for $26 per unit. According to the cost accounting system, the costs of making one unit of Part XYZ consist of $8 for direct materials, $4 for direct labor, $4.50 for variable manufacturing overhead, and $1.4 for fixed manufacturing overhead. The Parts Division has capacity of 5,000 units of part XYZ each month and currently is selling 4,200 units of Part XYZ each month. The Assembly Division of Mally Company can use Part XYZ in one of its products. At present, the Assembly Division is purchasing an equivalent part from an outside supplier for $17.3 per unit. The Assembly Division needs 2,000 units of the part each month. It has been suggested that the Assembly Division buy Part XYZ from the Parts Division instead of buying the equivalent part from the outside supplier. As far as the Parts Division is concerned, what is the lowest acceptable transfer price?
XYZ Corporation manufactures and sells electronic gadgets. The company uses a standard cost system to analyze its manufacturing costs. The standard cost of producing one gadget is as follows: Direct materials: 3 units @ $15 per unit Direct labor: 2 hours @ $20 per hour Variable overhead: $10 per gadget Fixed overhead: $5,000 per month During the month of June, the company produced 5,000 gadgets and incurred the following actual costs: Direct materials: 14,500 units purchased at $14.50 per unit Direct labor: 9,800 hours worked at an average rate of $21 per hour Variable overhead: $52,000 Fixed overhead: $5,200 Answer the following questions and show all calculations: a) Compute the direct materials price and efficiency variances. b) Compute the direct labor rate and efficiency variances. c) Compute the variable overhead spending and efficiency variances. d) Compute the fixed overhead budget and volume variances. e) Prepare a cost variance analysis table to summarize the results.
[The following information applies to the questions displayed below.] Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750. 7. What is the variable overhead spending variance for March? (Do not round intermediate calculations. Round the actual overhead rate to two decimal places. Indicate the effect of each…
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labour-hours, and its standard costs per unit are as follows: Direct materials: 5 kg at $10.00 per kg Direct labour: 2 hours at $15 per hour Variable overhead: 2 hours at $5 per hour Total standard cost per unit The company planned to produce and sell 32,000 units in March. However, during March the company actually produced and sold 37,600 units and incurred the following costs: a. Purchased 200,000 kg of raw materials at a cost of $9.40 per kg. All of this material was used in production. b. Direct labour: 75,000 hours at a rate of $16 per hour. c. Total variable manufacturing overhead for the month was $558,750. 5. What is the labour rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Do not round intermediate calculations.) Labour rate variance
Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 36,000 units next year and Product L is expected to sell 7,200 units. A unit of either product requires 0.9 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $3,304,800. Required: 1-a. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? 1-b. Compute the total amount of overhead cost that would be applied to each product. 2. Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a product-level cost. The total manufacturing overhead would be divided in half between the two products, with…
Dawson Toys, Limited, produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 8 microns per toy at $0.32 per micron Direct labor: 1.3 hours per toy at $7.50 per hour During July, the company produced 4,800 Maze toys. The toy's production data for the month are as follows: Direct materials: 78,000 microns were purchased at a cost of $0.29 per micron. 30,000 of these microns were still in inventory at the end of the month. Direct labor. 6,740 direct labor-hours were worked at a cost of $53,246. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price and quantity…