Inputs Direct materials Direct labor Variable manufacturing overhead Actual results: Actual output Actual variable manufacturing overhead cost $ Actual direct materials cost Actual direct labor cost Standard Quantity 2.9 pounds 0.65 hours 0.65 hours Actual Quantity 6,550 pounds 1,120 hours Required: Use the information above to calculate the variances. 2,120 units 7,260 $ $ $ isese $ $ Standard Price 4.15 per pound 22.00 per hour 5.89 per hour Actual Price 3.97 per pound 21.35 per hour

Inputs Direct materials Direct labor Variable manufacturing overhead Actual results: Actual output Actual variable manufacturing overhead cost $ Actual direct materials cost Actual direct labor cost Standard Quantity 2.9 pounds 0.65 hours 0.65 hours Actual Quantity 6,550 pounds 1,120 hours Required: Use the information above to calculate the variances. 2,120 units 7,260 $ $ $ isese $ $ Standard Price 4.15 per pound 22.00 per hour 5.89 per hour Actual Price 3.97 per pound 21.35 per hour

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Description: InputsDirect materialsDirect laborVariable manufacturing overheadActual results:Actual outputActual variable manufacturing overhead cost $Actual direct materials costActual direct labor costStandard Quantity2.9 pounds0.65 hours0.65 hoursActual Quant

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 6E: Computing materials variances D-List Calendar Co. specializes in manufacturing calendars that depict...

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Direct materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Instructions Determine (A) the standard cost per unit for direct materials and direct labor; (B) the price variance, quantity variance, and total direct materials cost variance; and (C) the rate variance, time variance, and total direct labor cost variance.
Refer to the data in Exercise 9.15. Required: 1. Compute overhead variances using a two-variance analysis. 2. Compute overhead variances using a three-variance analysis. 3. Illustrate how the two- and three-variance analyses are related to the four-variance analysis. Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total 787,200, of which 556,800 is fixed overhead. A total of 119,400 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were 230,600, and actual fixed overhead costs were 556,250. Required: 1. Compute the fixed overhead spending and volume variances. How would you interpret the spending variance? Discuss the possible interpretations of the volume variance. Which is most appropriate for this example? 2. Compute the variable overhead spending and efficiency variances. How is the variable overhead spending variance like the price variances of direct labor and direct materials? How is it different? How is the variable overhead efficiency variance related to the direct labor efficiency variance?
(Appendix) Calculating factory overhead: three variances Using the data given in E8-17, calculate the following overhead variances: a. Spending variance. b. Production-volume variance. c. Efficiency variance. d. Was the factory overhead under- or overapplied? By what amount? In all problems involving variances, use F and U to indicate favorable and unfavorable variances, respectively.
Mulliner Company showed the following information for the year: Required: 1. Calculate the standard direct labor hours for actual production. 2. Calculate the applied variable overhead. 3. Calculate the total variable overhead variance.
Rath Company showed the following information for the year: Required: 1. Calculate the standard direct labor hours for actual production. 2. Calculate the applied variable overhead. 3. Calculate the total variable overhead variance.
Kamen Manufacturing Co. estimates the following labor and overhead costs for the period: Required: Use the four-variance method for overhead analysis. Calculate the variances for direct labor and overhead. Prove that the overhead variances equal over- or underapplied factory overhead for the period.
Computing materials variances D-List Calendar Co. specializes in manufacturing calendars that depict obscure comedians. The company uses a standard cost system to control its costs. During one month of operations, the direct materials costs and the quantities of paper used showed the following: Calculate the following: 1. Total cost of purchases for the month 2. Materials purchase price variance 3. Materials quantity variance 4. Net materials variance
Variances Refer to Cornerstone Exercise 9.6. Required: 1. Calculate the variable overhead spending variance using the formula approach. (If you compute the actual variable overhead rate, carry your computations out to five significant digits and round the variance to the nearest dollar.) 2. Calculate the variable overhead efficiency variance using the formula approach. 3. Calculate the variable overhead spending variance and variable overhead efficiency variance using the three-pronged graphical approach. 4. What if 26,100 direct labor hours were actually worked in February? What impact would that have had on the variable overhead spending variance? On the variable overhead efficiency variance? Standish Company manufactures consumer products and provided the following information for the month of February: Required: 1. Calculate the fixed overhead spending variance using the formula approach. 2. Calculate the volume variance using the formula approach. 3. Calculate the fixed overhead spending variance and volume variance using the three-pronged graphical approach. 4. What if 129,600 units had actually been produced in February? What impact would that have had on the fixed overhead spending variance? On the volume variance?
Direct Material Direct Labor Standard Cost Data per 1 Unit Quantity Price 3 lbs $2.00/lb 2 hrs $4.00/hr Actual Data: Units produced Material purchase & usage Direct Labor Show all computations. 25 100 lbs at $2.20 per lb 30 hrs; total cost $129 a) Compute price variance, quantity variance, direct material variance b) Compute rate variance, efficiency variance, direct labor variance
Print Item Acme Inc. has the following information available: Actual price paid for material $1.00 Standard price for material $1.10 90 Actual quantity purchased and used in production 110 Standard quantity for units produced Actual labor rate per hour $15 Standard labor rate per hour $16 Actual hours 200 230 Standard hours for units produced A. Compute the material price and quantity, and the labor rate and efficiency variances. Enter all amounts as positive numbers. Material price variance Material quantity variance Labor rate variance Labor efficiency variance 2$ B. What are some possible causes for this combination of favorable and unfavorable variances?
A company reports the following information for its direct labor. Actual hours of direct labor used Actual rate of direct labor per hour Standard rate of direct labor per hour Standard hours of direct labor for units produced ! AH = Actual Hours SH= Standard Hours AR= Actual Rate SR Standard Rate Compute the direct labor rate and efficiency variances and identify each as favorable or unfavorable. Q F1 Actual Cost @ 2 W F2 # 3 E 80 F3 $ $ 4 0 Ơ F4 R $ % 5 0 0 * DII 8 F8 Standard Cost ( 9 F9 ) U I O F1
Assume the following information (the quantity of materials purchased the quantity used): Actual total cost of direct materials Direct materials price variance Standard quantity of materials allowed per unit Standard price per pound of material Standard rate per direct labor hour Actual total direct labor hours Direct labor efficiency variance Standard number of direct labor hours allowed per unit. Direct labor spending variance What is the standard price (SP) per pound of materials? $ 65,560 $ 5,960 U 3 pounds $ 4.00 $ 5.00 6,500 $ 3,500 F 2 hours $ 400 U