Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Chapter 10, Problem 47P
Springsteen Company manufactures guitars. The company uses a standard,
Each finished guitar contains seven pounds of veneered wood. In addition, one pound of wood is typically wasted in the production process. The veneered wood used in the guitars has a standard price of $12 per pound. The other parts needed to complete each guitar, such as the bridge and strings, cost $15 per guitar. The labor standards for Springsteen’s two production departments are as follows:
Construction Department: 6 hours of direct labor at $20 per hour
Finishing Department: 3 hours of direct labor at $15 per hour
The following pertains to the month of July.
- 1. There were no beginning or ending work-in-process inventories in either production department.
- 2. There was no beginning finished-goods inventory.
- 3. Actual production was 500 guitars, and 300 guitars were sold on account for $400 each.
- 4. The company purchased 6,000 pounds of veneered wood at a price of $12.50 per pound.
- 5. Actual usage of veneered wood was 4,500 pounds of the wood purchased during July.
- 6. Enough parts (bridges and strings) to finish 600 guitars were purchased at a cost of $9,000.
- 7. The Construction Department used 2,850 direct-labor hours. The total direct-labor cost in the Construction Department was $54,150.
- 8. The Finishing Department used 1,570 direct-labor hours. The total direct-labor cost in that department was $25,120.
- 9. There were no direct-material variances in the Finishing Department.
Required:
- 1. Prepare a schedule that computes the
standard costs of direct material and direct labor in each production department. - 2. Prepare three exhibits that compute the July direct-material and direct-labor variances in the Construction Department and the July direct-labor variances in the Finishing Department. (Refer to Exhibits 10–2, 10–3, and 10–4 for guidance.)
- 3. Prepare a cost variance report for July similar to that shown in Exhibit 10–5. Springsteen Company investigates all variances greater than $5,000 or 5%.
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Chapter 10 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 10 - Prob. 1RQCh. 10 - What is meant by the phrase management by...Ch. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - What is the interpretation of the direct-material...Ch. 10 - What manager is usually in the best position to...Ch. 10 - What is the interpretation of the direct-material...Ch. 10 - Prob. 10RQ
Ch. 10 - Prob. 11RQCh. 10 - What is the interpretation of the direct-labor...Ch. 10 - What manager is generally in the best position to...Ch. 10 - What is the interpretation of the direct-labor...Ch. 10 - What manager is generally in the best position to...Ch. 10 - Prob. 16RQCh. 10 - Describe five factors that managers often consider...Ch. 10 - Discuss several ways in which standard-costing...Ch. 10 - Describe how standard costs are used for product...Ch. 10 - Prob. 20RQCh. 10 - Prob. 21RQCh. 10 - Saskatewan Can Company manufactures recyclable...Ch. 10 - Refer to the data in the preceding exercise. Use...Ch. 10 - Cayuga Hardwoods produces handcrafted jewelry...Ch. 10 - During June, Danby Companys material purchases...Ch. 10 - Refer to the data in the preceding exercise. Draw...Ch. 10 - The director of cost management for Odessa Company...Ch. 10 - Due to evaporation during production, Plano...Ch. 10 - Prob. 30ECh. 10 - Refer to the data in Exercise 1022, regarding...Ch. 10 - Saskatewan Can Company manufactures recyclable...Ch. 10 - New Jersey Valve Company manufactured 7,800 units...Ch. 10 - Prob. 34PCh. 10 - During May, Joliet Fabrics Corporation...Ch. 10 - Sal Amato operates a residential landscaping...Ch. 10 - Santa Rosa Industries uses a standard-costing...Ch. 10 - The following data pertain to Colgate-Palmolives...Ch. 10 - Orion Corporation has established the following...Ch. 10 - Associated Media Graphics (AMG) is a rapidly...Ch. 10 - The director of cost management for Portland...Ch. 10 - Ogwood Companys Johnstown Division is a small...Ch. 10 - Quincy Farms produces items made from local farm...Ch. 10 - Schiffer Corporation manufactures agricultural...Ch. 10 - Aqua float Corporation manufactures rafts for use...Ch. 10 - Rocky Mountain Camping Equipment, Inc. has...Ch. 10 - Springsteen Company manufactures guitars. The...Ch. 10 - Springsteen Company manufactures guitars. The...Ch. 10 - European Styles, Inc. manufactures womens blouses...Ch. 10 - MacGyver Corporation manufactures a product called...
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