Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not "ideal" at this point, but the management is working toward that as a goal. At present, the company uses the following standards. Materials Item Materials Item Per unit 2 lb. Direct labor Per unit 15 min. $8.00 per hr. Predetermined overhead rate based on direct labor hours $3.83 Labor Cost 80.00¢ per lb. Cost M The January figures for purchasing, production, and labor are: The company purchased 230,100 pounds of raw materials in January at a cost of 78¢ a pound. Production used 230,100 pounds of raw materials to make 116,000 units in January. Direct labor spent 18 minutes on each product at a cost of $7.80 per hour. Overhead costs for January totaled $41,342 variable and $75,000 fixed. Answer the following questions about standard costs.
Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not "ideal" at this point, but the management is working toward that as a goal. At present, the company uses the following standards. Materials Item Materials Item Per unit 2 lb. Direct labor Per unit 15 min. $8.00 per hr. Predetermined overhead rate based on direct labor hours $3.83 Labor Cost 80.00¢ per lb. Cost M The January figures for purchasing, production, and labor are: The company purchased 230,100 pounds of raw materials in January at a cost of 78¢ a pound. Production used 230,100 pounds of raw materials to make 116,000 units in January. Direct labor spent 18 minutes on each product at a cost of $7.80 per hour. Overhead costs for January totaled $41,342 variable and $75,000 fixed. Answer the following questions about standard costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject :- Accounting
Transcribed Image Text:Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not "ideal"
at this point, but the management is working toward that as a goal. At present, the company uses the following standards.
Item
Materials
Item
Materials
Labor
Per unit
2 lb.
Direct labor
Per unit
Cost
15 min.
$8.00 per hr.
Predetermined overhead rate based on direct labor hours $3.83
Cost
80.00¢ per lb.
The January figures for purchasing, production, and labor are:
The company purchased 230,100 pounds of raw materials in January at a cost of 78¢ a pound.
Production used 230,100 pounds of raw materials to make 116,000 units in January.
Direct labor spent 18 minutes on each product at a cost of $7.80 per hour.
Overhead costs for January totaled $41,342 variable and $75,000 fixed.
Answer the following questions about standard costs.
Transcribed Image Text:Your answer is correct.
What is the total labor variance? (Round per unit calculations to 2 decimal places, e.g. 1.25 and final answer to O decimal places, e.g.
125.)
Total labor variance $
(g)
eTextbook and Media
Your answer is partially correct.
39440 i
Total overhead variance
Unfavorable:
What is the total overhead variance? (Round per unit calculations to 2 decimal places, e.g. 1.25 and final answer to 0 decimal places, e.g.
125.)
105798
Attempts: 1 of 7 used.
Unfavorable
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