From the foregoing information, compute the following variances and indicate whether they are favorable (F) or unfavorable (U). State why each of the variances occurred.Material price variance and Material usage varianceDirect labour rate variance and Direct labour efficiency varianceVariable overhead spending variance and Variable overhead efficiency variance Kokolat Sdn. Bhd. is a manufacturer of premium cocoa beans. Kokolat budgeted 20,000 bottles tobe produced per month. The standards below have been established for its variable costs ofproduction.Premium cocoa beansStandard cost per unit(RM)Direct material(6 kgs at RM4 per kg)Direct labour(1 hour at RM7 per hour)Variable production overhead(1 direct labour hour at RM3)247334In July, 18,500 bottles were produced. A total of 113, 500 kgs for the costs of RM442,650 of directmaterials were purchased and used. The direct labour costed RM129,940 for a total of 17,800direct labour hours worked. Actual variable production overhead costs incurred was RM58,800.

Name: From the foregoing information, compute the following variances and in
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: From the foregoing information, compute the following variances and indicate whether they are favorable (F) or unfavorable (U). State why each of the variances occurred.Material price variance and Material usage varianceDirect labour rate variance an

A Variance is a difference between a budgeted, planned, or standard cost and the actual amount…

Business

Accounting

Direct material (6 kgs at RM4 per kg) Direct labour | (1 hour at RM7 per hour) Variable production overhead (1 direct labour hour at RM3) 24 7 ww ww 34 In July, 18,500 bottles were produced. A total of 113, 500 kgs for the costs of RM442,650 of direct materials were purchased and used. The direct labour costed RM129,940 for a total of 17,800 direct labour hours worked. Actual variable production overhead costs incurred was RM58,800. ww

Direct material (6 kgs at RM4 per kg) Direct labour | (1 hour at RM7 per hour) Variable production overhead (1 direct labour hour at RM3) 24 7 ww ww 34 In July, 18,500 bottles were produced. A total of 113, 500 kgs for the costs of RM442,650 of direct materials were purchased and used. The direct labour costed RM129,940 for a total of 17,800 direct labour hours worked. Actual variable production overhead costs incurred was RM58,800. ww

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...

See similar textbooks

Similar questions

The Molis Company has the capacity to produce 15,000 haks each month. Current regular production and sales are 10,000 haks per month at a selling price of P15 each. Based on this level of activity, the following unit costs are incurred: Direct materials P5.00 Direct labor 3.00 Variable manufacturing overhead 0.75 Fixed manufacturing overhead 1.50 Variable selling expense 0.25 Fixed administrative expense 1.00 The fixed costs, both manufacturing and administrative, are constant in total within the relevant range of 10,000 to 15,000 haks per month. The Molis Company has received a special order from a customer who wants to pay a reduced price of P10 per hak. There would be no selling expense in connection with this special order. And, this order would have no effect on the company's other sales. 1. Suppose the special order is for 4,000 haks this month. If this offer is…
The Molis Company has the capacity to produce 15,000 haks each month. Current regular production and sales are 10,000 haks per month at a selling price of P15 each. Based on this level of activity, the following unit costs are incurred: Direct materials P5.00 Direct labor 3.00 Variable manufacturing overhead 0.75 Fixed manufacturing overhead 1.50 Variable selling expense 0.25 Fixed administrative expense 1.00 The fixed costs, both manufacturing and administrative, are constant in total within the relevant range of 10,000 to 15,000 haks per month. The Molis Company has received a special order from a customer who wants to pay a reduced price of P10 per hak. There would be no selling expense in connection with this special order. And, this order would have no effect on the company's other sales. 1. Suppose the special order is for 4,000 haks this month. If this offer is…
Norton Ltd manufactures a single product, which is sold for N$136 per unit.The standard variable costs per unit of the product are: Direct Material 4 kilos at N$7.50 per kilo Direct labour 5 hours at N$11 per hour Production overhead N$2.4 per direct labour hour Sales overhead N$ 5 per unit The company expects to manufacture and sell 8,000 units in total during the forthcoming year (Year 1).The fixed overhead costs for the forthcoming year are: N$ Production 60 000 Administration 35 000 Sales 11 000 REQUIRED:a) Calculate for the forthcoming year (Year 1):i. The break-even point in dollars and unitsii. The margin of safety in dollars and units iii. The amount of sales in units that would earn the company a profit of $180,000
Salle products manufacture and distribute a single product. The company, which intends to maintain its unit product sales price for the current year, has budgeted to sell 15,000 units. Sales revenue of RM 1,200,000 is expected. Fixed overheads are forecasted at RM 120,000 for the year. The variable costs per unit are as follows: Direct materials RM 40 Direct labour RM 12 Variable overheads RM 8 Required: Calculate for the current year the: contribution/sales ratio break-even point in sales revenue and units margin of safety as a percentage of sales budgeted profit
The Molis Corporation has the capacity to produce 15,000 hats each month. Current regular production and sales are 10,000 hats per month at a selling price of $15 each. Based on this level of activity, the following unit costs are incurred: Per Unit Direct Material $5.00 Direct Labor $3.00 Variable manufacturing overhead $0.75 Fixed manufacturing overhead $1.05 Variable selling expenses $0.75 Fixed SG&A expense $1.00 Unit product cost $12.00 The Molis Corporation has received a special order from a customer who wants to pay a reduced price of $10 per hat. There would be no selling expense in connection with this special order. And, this order would have no effect on the company's other sales. Suppose the special order is for 4,500 hats this month. If this offer is accepted by Molis, what is the impact on the company's operating income.
The Asian Transmission Co. produces certain items at a labor cost of P 115 each, material cost of P 76 each and variable cost of P 9 each. If the item has a unit price of P 600, how many units must be manufactured each month for the manufacturer to break even if the monthly overhead is P428,000
Razi Company is a manufacturer of the leather belt based in Kelang, Selangor. The company estimated a total of 400 units of production for the most recent period. The standard costs per unit are given below: Standard cost per unit (RM) Leather Belt Direct material (2m at RM1.50 per meter) 3.00 Direct labour (1.5 hours at RM6 per hour) Variable production overhead (1.5 hours at RM3.40) 9.00 5.10 17.10 The budgeted and actual units produced for this period were 400 units. The following is the actual costs incurred per unit. Leather Belt Actual cost per unit (RM) Direct material (2.1m at RM1.60 per meter) Direct labour (1.4 hours at RM6.50 per hour) Variable production overhead (1.4hours at RM3.10) 3.36 9.10 4.34 16.80 Required: From the foregoing information, compute the following variances and indicate whether they are favorable (F) or unfavorable (U). State why each of the variances occurred. Material price variance, Material usage variance, Direct labour rate variance, Direct labour…
The normal production capacity of a company is 10,000 units per month. On this basis, the fixed costs are assigned, which, in unit terms, amount to:General and administrative expenses $25.00Selling expenses $5.00Unit variable costs are fully proportional to production and sales, and amount to:Direct Labor $18.00Materials $14.50Manufacturing overhead $8.00 The price of the product in the market is $90 and the commissions to the sellers correspond to 5% of the sales. The company is studying the possibility of closing for a time that could reach 2 years, due to a period of depression that is estimated to affect the industry in that period, a fact that would reduce its activity levels to 20% of its normal capacity. If it closes, fixed charges could be reduced by 30%, and if it continues to operate, the reduction would only reach 15%. What would be the differential savings of opting for the best alternative?
Company produces a single product. The standard costs for one unit of product are as follows: Direct material: 6 kilograms at Php0.50 per kilogram = Php3 Direct labor: 1.8 hours at Php10 per hour = Php18 Variable manufacturing overhead: 1.8 hours at Php5 per hour 9 Total standard variable cost per unit Php30 Note: Variable manufacturing overhead is applied to products on the basis of direct labor-hours. 2,000 units were produced in June with the following costs: Material purchased: 18,000 kilograms at Php0.60 per kilogram = Php10,800 Material used in production: 14,000 kilograms Direct labor: 4,000 hours at Php9.75 per hour = Php39,000 Variable manufacturing overhead costs incurred Php20,800 Direct material: 6 kilograms at Php0.50 per kilogram Php3 Direct labor: 1.8 hours at Php10 per hour 18 Variable manufacturing overhead: 1.8 hours at Php5 per hour 9 Total standard variable cost per unit Php30 Required: Compute the following: direct materials direct labor variable manufacturing…
Silva Plastics Company has established standard cost for a unit of manufactured product as follows: Materials (3 kgs. @ P9) Labor (1 hour @ P84) Variable overhead (1 hour @ P24) P27.00 84.00 24.00 Fixed overhead (1 hour @ P36) 36.00 Total standard unit cost P171.00 At normal operating capacity, 100,000 units of product should be manufactured in a year. Costs data pertaining to the operations for the year are summarized below: P1,908,000 Materials purchased (200,000 kgs.) Materials used in production 185,000 kgs. Labor hours 58,000 Labor rate P90.00 per hour Factory overhead- Variable P1,380,000 Fixed P3,600,000 During the year, 60,000 units of product were put into production and were completed. There were no units in process at the beginning or at the end of the year. There are also no inventories of raw materials or finished goods at the beginning of the year. REQUIRED: 1. Determine the materials and labor variances graphically and by formula. 2. Prepare the flexible overhead budget…
Silva Plastics Company has established standard cost for a unit of manufactured product as follows: Materials (3 kgs. @ P9) Labor (1 hour @ P84) Variable overhead (1 hour @ P24) P27.00 84.00 24.00 Fixed overhead (1 hour @ P36) 36.00 Total standard unit cost P171.00 At normal operating capacity, 100,000 units of product should be manufactured in a year. Costs data pertaining to the operations for the year are summarized below: P1,908,000 Materials purchased (200,000 kgs.) Materials used in production 185,000 kgs. Labor hours 58,000 Labor rate P90.00 per hour Factory overhead- Variable P1,380,000 Fixed P3,600,000 During the year, 60,000 units of product were put into production and were completed. There were no units in process at the beginning or at the end of the year. There are also no inventories of raw materials or finished goods at the beginning of the year. REQUIRED: 3. Determine the overhead variances using the 2-way method.
Winter Grow Inc. manufactures a range of heat mats. The production information for its standard heat mat is follows: Production Information for Standard Heat Mat Production Information Amount Monthly production capacity 25,000 units Current level of production 18,000 units Normal selling price per unit $23 per unit Variable manufacturing costs $5 per unit Variable selling and administrative expenses $2 per unit Fixed manufacturing costs (allocated) $4 per unit Fixed selling and administrative expenses (allocated) $2 per unit During current month, the company received an offer to sell 5,000 lights to an exporter for $13 per unit. The variable selling and administrative expenses per unit will be reduced by $1 as this is a one-off offer and some of the selling expenses would not be payable on this offer. Acceptance of this order does not affect the pricing policy in the domestic market. How much would be the profit or loss from the acceptance of this offer? Group…