Question

In: Accounting

Sheffield, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems....

Sheffield, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows.

Standard Price Standard Quantity Standard Cost
Direct materials $4 per yard 1.50 yards $6.00
Direct labor $12 per DLH 0.50 DLH 6.00
Variable overhead $4 per DLH 0.50 DLH 2.00
Fixed overhead $6 per DLH 0.50 DLH 3.00
$17.00


Sandy Robison, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November.

The company purchased and used 80,100 yards of fabric during the month. Fabric purchases during the month were made at $3.90 per yard. The direct labor payroll ran $314,825, with an actual hourly rate of $12.25 per direct labor hour. The annual budgets were based on the production of 45,000 shirts, using 251,000 direct labor hours. Though the budget for November was based on 49,100 shirts, the company actually produced 51,100 shirts during the month.

Variable Overhead Budget
Annual Budget Per Shirt November—Actual
Indirect material $446,000 $0.90 $48,700
Indirect labor 304,000 0.60 31,100
Equipment repair 195,000 0.40 20,800
Equipment power 54,000 0.10 7,500
     Total $999,000 $2.00 $108,100


Fixed Overhead Budget
Annual Budget November—Actual
Supervisory salaries $259,000 $21,400
Insurance 345,000 27,800
Property taxes 84,000 6,800
Depreciation 321,000 25,500
Utilities 213,000 20,000
Quality inspection 281,000 25,300
     Total $1,503,000 $126,800

A. Calculate the direct materials price and quantity variances for November.

B. Calculate the direct labor rate and efficiency variances for November.

C. Calculate the variable overhead spending and efficiency variances for November.

D. Calculate the fixed overhead spending variance for November.

Solutions

Expert Solution


Related Solutions

Marigold, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems....
Marigold, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Standard Price Standard Quantity Standard Cost Direct materials $3 per yard 2.00 yards $6.00 Direct labor $14 per DLH 0.75 DLH 10.50 Variable overhead $3.20 per DLH 0.75 DLH 2.40 Fixed overhead $3 per DLH 0.75 DLH 2.25 $21.15 Sandy Robison, operations manager, was reviewing the results for November when he became upset by...
JeziBee Enterprises produces T-shirts and sells to customers with fancy statement slogans. The standardized data of...
JeziBee Enterprises produces T-shirts and sells to customers with fancy statement slogans. The standardized data of costs of direct material, direct labor, and overhead is given in Table 1. Table 1: Standard Data of Direct Material, Direct Labor and Overhead Standard Price Standard Quantity Standard Cost Direct materials $3.00 per yard 2 yards $6.00 Direct labor $14 per DLH 0.75 DLH 10.50 Variable overhead $3.20 per DLH 0.75 DLH 2.40 $18.90 An operations manager, Randy Rooch, was confronting with numerous...
Templeton’s T’s Ltd. designs and manufactures T-shirts with slogans. The company has two production departments: Sewing...
Templeton’s T’s Ltd. designs and manufactures T-shirts with slogans. The company has two production departments: Sewing and Stamping. The quality of the work completed in each of these departments is managed by the Quality Control department. Quality control normally budgets for 21,000 inspection hours per year with $609,000 of budgeted fixed costs and $399,000 of budgeted variable costs at this level of activity. Sewing’s use of Quality Control is budgeted at 12,000 hours a year while Stamping is budgeted at...
Sheffield Manufactures Ltd, operate in the printing and packaging industry. They feel that some of their...
Sheffield Manufactures Ltd, operate in the printing and packaging industry. They feel that some of their older printing and labelling machines need to be replaced. They seek help in order to calculate their cost of capital. Their present capital structure is as follows: • 800 000 R2 ordinary shares now trading at R2.50 per share. • 250 000 preference shares trading at R2 per share (issued at R3 per share), at 10% fixed rate of interest. • A bank loan...
ToyWorks Ltd. is a company that manufactures and sells a single product, which they call a...
ToyWorks Ltd. is a company that manufactures and sells a single product, which they call a Toodle. For planning and control purposes they utilize a monthly master budget, which is usually developed at least six months in advance of the budget year. Their fiscal year end is June 30. During the summer of 2019, Chris Leigh, the ToyWorks controller, spent considerable time with Pat Frazer, the Manager of Marketing, putting together a sales forecast for the next budget year (July...
Renew Energy Ltd. (REL) manufactures and sells directly to customers a special long-lasting rechargeable battery for...
Renew Energy Ltd. (REL) manufactures and sells directly to customers a special long-lasting rechargeable battery for use in digital electronic equipment. Each battery sold comes with a guarantee that the company will replace free of charge any battery that is found to be defective within six months from the end of the month in which the battery was sold. On June 30, 2020, the Warranty Liability account had a balance of $45,000, but by December 31, 2020, this amount had...
1) US-based Rogers Rods & Reels Ltd. manufactures and sells various types of fishing equipment. At...
1) US-based Rogers Rods & Reels Ltd. manufactures and sells various types of fishing equipment. At the end of 2008, Rogers had estimated for the production and sale of 15 000 bass fishing rods. Each rod has a standard calling for 1.5 pounds of direct material at a standard cost of $8.00 per pound and 15 minutes of direct labour time at a standard cost of $.18 per minute. During 2009, Rogers actually produced and sold 16 000 rods. These...
SallyMay, Inc., designs and manufactures T-shirts. It sells its T-shirts to brand name clothes retailers in...
SallyMay, Inc., designs and manufactures T-shirts. It sells its T-shirts to brand name clothes retailers in lots of one dozen. SallyMay's May 2013 static budget and actual results for direct inputs are as follows: Static Budget Number of T-shirt lots (1 lot1 dozen) 400 Per Lot of T-shirts: Direct materials 14 meters at $1.70 per meter$23.80 Direct manufacturing labor 1.6 hours at $8.10 per hour $12.96 Actual Results Number of T-shirt lots sold 450 Total Direct Inputs: Direct materials 6,840...
Shirts-R-Us sells blouses in Florida. Blouses are imported from Pakistan and sold to customers in their...
Shirts-R-Us sells blouses in Florida. Blouses are imported from Pakistan and sold to customers in their stores. Salespeople are paid a base salary and a commission of $14 on each blouse they sell. The invoice cost of the blouse to the company is $36 per blouse. In addition, Shirts-R-Us pays rent of $160,000 a year, salaries total $140,000 a year and advertising is $300,000 a year. The blouses are sold for $80 each. The breakdown of the costs and revenues...
Jade Ltd. manufactures a product, which regularly sells for $66. This product has the following costs...
Jade Ltd. manufactures a product, which regularly sells for $66. This product has the following costs per unit at the expected production of 48518 units: Direct labour $15 Direct materials 9 Manufacturing overhead (37% is variable) 24 The company has the capacity to produce 51625 units. A wholesaler has offered to pay $56 for 12218 units. If Jade Ltd. accepts this special order, operating income would increase (decrease) by: Select one: a. $282480 b. $97744 c. $-19276 d. $-6625 The...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT