Question

In: Accounting

Eagle Company uses a standard cost system that has provided the following data: Units of output...

Eagle Company uses a standard cost system that has provided the following data:

Units of output manufactured: 85
Direct labor:
Standard hours allowed: 2 hours per unit of product
Standard wage rate: $16.10 per hour
Actual direct labor: 190

hours, total cost of $3,439

A. The direct labor rate variance for the period was:

B. The direct labor efficiency variance for the period was:

C. The journal entry to record the cost of direct labor used in this period includes:

Solutions

Expert Solution

A)
Direct Labor rate variance = (Standard rate-Actual rate)*Actual labor hours
= (16.10-18.10)*190
= 380 Unfavorable
Working:
Actual Labor rate = Actual Direct Labor costs/Actual direct labor hours
= $      3,439 /         190
= $      18.10
B)
Labor Efficiency variance = (Standard hours-Actual hours)*Standad labor rate
= (170-190)*16.10
= 322 Unfavorable
Working:
Standard Labor hours = Units of output*standard labor hours per unit
= 85*2
= 170
C)
Journal Entry will include:
Accounts Titles Debit Credit
Work in Process $     2,737
Labor rate Variance           380
Labor efficicnecy Variance           322
Wages Payable       3,439
(To record variance adjustments)
Working:
Standard Cost = 85 x 2 x $ 16.10 = $     2,737

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Thompson Company uses a standard cost system for its single product. The following data are available:...
Thompson Company uses a standard cost system for its single product. The following data are available: Actual experience for the current year: Raw materials purchased and used (12,000 yards at $13.00 per yard)         $156,000 Direct labor costs (10,200 hours at $10.00 per hour) ………… $102,000 Actual variable overhead cost …………………………………............... $84,150 Units produced ……………………………………………….......................... 12,600 units Standards per unit of product: Raw Materials................. 1.1 yarts at $15.00 per yard Direct Labor..................... 0.8 hours at $9.50 per hour Variable Overhead........ $8...
Thompson Company uses a standard cost system for its single product. The following data are available:...
Thompson Company uses a standard cost system for its single product. The following data are available: Actual experience for the current year:   Purchases of raw materials (11,000 yards at $11.00 per yard) $ 121,000   Raw materials used 15,000 yards   Direct labor costs (10,400 hours at $8.00 per hour) $ 83,200   Actual variable overhead cost $ 84,050   Units produced 12,800 units Standards per unit of product:   Raw materials 1.5 yards at $13.00 per yard   Direct labor .8 hours at $7.50 per...
Thompson Company uses a standard cost system for its single product The following data is available...
Thompson Company uses a standard cost system for its single product The following data is available for the month of May 2017: Standards per unit of product: Direct materials 3 pounds at $8 per yard Direct labor 1.5 hours at $14 per hour Actual experience for the current year: Purchases of raw materials (15,000 pounds ) $124,500 Raw materials used $12,000 pounds Direct labor costs (6,720) $95,760 Units produced 4200 Required: Complete a table and state how well direct material...
Taylor Inc. uses a standard cost system. The company has the following results for the current...
Taylor Inc. uses a standard cost system. The company has the following results for the current period:    Budget Actual   Fixed overhead $ 160,000 $ 160,000   Units 6,500 units 6,000 units   Direct labour-hours (DLH) 13,333 hours 12,500 hours Standard quantity of DLH per unit 2.0152 hours    Variable overhead is applied at $27.50 per direct labour-hour. Actual variable overhead was $310,600.    Required: 1. Compute the fixed overhead budget variance and the volume variance. (Indicate the effect of each variance...
Kansas Company uses a standard cost accounting system. In 2020, the company produced 27,700 units. Each...
Kansas Company uses a standard cost accounting system. In 2020, the company produced 27,700 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,400 direct labor hours. During the year, 131,500 pounds of raw materials were purchased at $0.93 per pound. All materials purchased were used during the year. If the materials quantity variance was $19,665 unfavorable, what was the standard materials quantity...
Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,500 units. Each...
Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,500 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $11.00. Normal capacity was 49,500 direct labor hours. During the year, 130,000 pounds of raw materials were purchased at $0.90 per pound. All materials purchased were used during the year. (a)                 If the materials price variance was $1,300 favorable, what was the standard...
Your Company uses a standard cost system. The labor standard is 10 units per 8-hour day...
Your Company uses a standard cost system. The labor standard is 10 units per 8-hour day at a standard cost of $15 per hour. Last month employees worked 1,920 hours and produced 2,500 units. The total labor cost during this period was $29,184. What was the labor efficiency (Q) variance for this last pay period? $816 Unfavorable $816 Favorable $1,200 Unfavorable $1,200 Favorable
The following is information related to X Company, a company that uses a standard cost system:...
The following is information related to X Company, a company that uses a standard cost system: Standard cost card for 1 unit of Product A: Direct materials – Raw Material A   (1 kilogram @ $ 20/kg.)           $ 20 Direct materials – Raw Material B   (1 kilogram @$ 10/kg.)         $ 10 Direct labour       (1 hour @ $15/hr.)                                 $ 15 Variable overhead       (1 hour @ $ 5/hr.)                                  $   5 Fixed overhead    (1 hour @ $ 10/hr.)                                       $ 10 Total budgeted fixed...
The following is information related to X Company, a company that uses a standard cost system:...
The following is information related to X Company, a company that uses a standard cost system: Standard cost card for 1 unit of Product A: Direct materials – Raw Material A   (1 kilogram @ $ 20/kg.)           $ 20 Direct materials – Raw Material B   (1 kilogram @$ 10/kg.)         $ 10 Direct labour       (1 hour @ $15/hr.)                                 $ 15 Variable overhead       (1 hour @ $ 5/hr.)                                  $   5 Fixed overhead    (1 hour @ $ 10/hr.)                                       $ 10 Total budgeted fixed...
A cost accountant has derived the following data on the weekly output of standard size boxes...
A cost accountant has derived the following data on the weekly output of standard size boxes from a factory. Week Output (thousands) Total cost (thousand dollars) 1 20 60 2 2 25 3 4 26 4 23 66 5 18 49 6 14 48 7 10 35 8 8 18 9 13 40 (a) Determine the regression equation from which we can predict the total cost in terms of the weekly production. (4%) (b) In the following week it is...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT