In: Finance
Maple Leaf Production manufactures truck tires. The following
information is available for the last operating period.
Direct materials: 4 pounds at $2.00 | $ | 8.00 | |
Direct labor: 0.35 hours at $16.00 | 5.60 | ||
Variable production overhead: 0.15 machine-hours at $15 per hour | 2.25 | ||
Total variable costs | $ | 15.85 | |
Monthly budget $2,350,000
Direct materials purchased and used: 399,000 pounds at $1.70 | $ | 678,300 | |
Direct labor: 30,500 hours at $16.30 | 497,150 | ||
Variable overhead: 15,000 machine-hours at $15.80 per hour | 237,000 | ||
Fixed overhead | 2,360,000 | ||
Required:
a. Prepare a cost variance analysis for each variable cost
for Maple Leaf Productions.
b. Prepare a fixed overhead cost variance
analysis.
c. (Appendix) Prepare the journal entries to
record the activity for the last period using standard costing.
Assume that all variances are closed to cost of goods sold at the
end of the operating period.