Question

In: Accounting

Standards (for a planned level of production of 2,200 units per month) Direct Materials: Yards per...

Standards (for a planned level of production of 2,200 units per month)

Direct Materials: Yards per costume12.50yards,, Price per yard $26.00average

Direct Labor: D.L. Hours per costume 62.00hours,, D.L. Rate per hour $44.50average

Variable MOH standard rate per direct labor hour $4.35per D.L. hour,,Fixed MOH standard rate per direct labor hour $9.47per D.L. hour,,Total Budgeted Fixed MOH (for 1 month) $ 1,250,000

Actual cost and data from the current month:

Actual number of yards of materials purchased 28,500

Actual cost of materials purchased $ 810,000 $28.42per yd

Actual number of yards used in production 27,350

Actual number of costumes produced 2,300

Actual direct labor hours 133,500

Actual direct labor cost $5,500,000 $41.20per hr

Actual variable MOH (in total) $665,000

Actual fixed MOH (in total) $1,488,000

Variable Manufacturing Overhead
Actual Actual Input Quantity Flexible
Cost Incurred x Budgeted (Std) Rate Budget (Applied) Allocated
  
Spending Variance Efficiency Varience
Flexible Budget (TOTAL) Variance

Green is unfavorable or favorable and yellow is the answer

Solutions

Expert Solution

Cost card for 2300 units
Particulars Standard cost for actual production Particulars Actual cost
Quantity & hour Rate($/yard & $/hr) Amount Quantity & hour Rate($/yard & $/hr) Amount
Direct Material 28750.00 26.00 $              747,500 Material purchased 28500 28.42 $                 810,000.00
(2300 units * 12.5 yard) Material used 27350 28.42 $                 777,315.79
Closing material 1150 $                    32,684.21
Direct labour 142600.00 44.50 $          6,345,700 Direct labour 133500 41.20 $              5,500,000.00
(2300 units * 62 hour) ($55.00,000/133500 hr)
Variable overhead 142600.00 4.35 $              620,310 Variable overhead 133500 4.98 $                 665,000.00
(2300 units * 62 hour) ($665,000/133500 hr)
Fixed overhead $          1,250,000 Fixed overhead $              1,488,000.00
Total Standard manufacturing cost $          8,963,510
Budgeted unit                       2,200
Actual unit                       2,300
A Computation of variances:
1 Material Price variance = (Standard rate - Actual rate) * Actual quantity purchase
Material Price variance = ( $26 - $28.42 ) * 28,500 yards = -$69,000 (Unfavorable)
2 Material efficiency variance = (Standard Quantity - Actual Quantity used) * Standard rate
Material efficiency variance = (28,750 yards-27,350 yards) * $26.00 = $36,400 (Favorable)
3 Labor Rate variance = (Standard rate - Actual rate) * Actual hours
Labor Rate variance = ( $44.50/hr-$41.20/hr ) * 133500 hr = $440,750 (favorable)
4 Labor efficiency variance = (Standard Hours - Actual Hours) * Standard rate
Labor efficiency variance = (142600 hr-133500 hr) *$44.50/hr = $404,950 (Favorable)
5 Variable Overhead rate variance = (Standard rate - Actual rate) * Actual hour used
Variable Overhead rate variance = ( $4.35/hr-$4.98/hr ) *133500 hr = -$84,275 (unfavorable)
6 Variable overhead efficiency variance = (Standard hour - Actual hour) * Standard rate
Variable overhead efficiency variance = (142600 hr-133500 hr) * $4.35/hr = $39,585 (Favorable)
7 Fixed Overhead Budget variance = (Actual Fixed overhead - Budgeted Fixed overhead
Fixed Overhead Budget variance = ($14,88,000 - $12,50,000)= -$2,38,000 (Unfavourable)
8 Fixed overhead Volume variance = (Actual output - Budgeted output) * Budgeted Overhead rate
Fixed overhead Volume variance = (2300 qty- 2200 qty) * ($12,50,000/2200 qty)= $56,818(favorable)
B Total variance:
Variances Favourable/
(Unfavourable)
MRV $                                  (69,000)
MEV $                                    36,400
LRV $                                  440,750
LEV $                                  404,950
VORV $                                  (84,275)
VOEV $                                    39,585
FOBV $                               (238,000)
FOVV $                                    56,818
Net favourable/(unfavourable) variance $                                  587,228
Please do upvote if you found the answer useful.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

The following data relate to the direct materials cost for the production of 2,200 automobile tires:...
The following data relate to the direct materials cost for the production of 2,200 automobile tires: Actual: 58,600 lbs. at $1.8 per lb. Standard: 56,800 lbs. at $1.85 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance $ Favorable Direct Materials Quantity Variance $ Unfavorable Total...
The following data relate to the direct materials cost for the production of 2,200 automobile tires:...
The following data relate to the direct materials cost for the production of 2,200 automobile tires: Actual: 55,700 lbs. at $1.9 $105,830 Standard: 56,800 lbs. at $1.95 $110,760 a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Price variance $ Quantity variance $ Total direct materials cost variance $ b. The direct...
For Russell, Inc., direct materials standards are 5 pounds at $15 per pound, direct labor standards...
For Russell, Inc., direct materials standards are 5 pounds at $15 per pound, direct labor standards are 2 hours at $25 per hour, and variable overhead is applied at a rate of $50 per hour. Russell budgeted to manufacture and sell 280,000 units for $550 per unit, but actually manufactured and sold 300,000 units for total revenues of $163,000,000, spending $25,000,000 for 1,600,000 pounds of direct materials and $14,000,000 for 550,000 hours of direct labor. Fixed overhead was budgeted at...
Easton Pump Company’s planned production for the year just ended was 18,200 units. This production level...
Easton Pump Company’s planned production for the year just ended was 18,200 units. This production level was achieved, and 21,800 units were sold. Other data follow: Direct material used $ 562,380 Direct labor incurred 291,200 Fixed manufacturing overhead 393,120 Variable manufacturing overhead 191,100 Fixed selling and administrative expenses 303,940 Variable selling and administrative expenses 91,910 Finished-goods inventory, January 1 4,500 units The cost per unit remained the same in the current year as in the previous year. There were no...
Easton Pump Company’s planned production for the year just ended was 18,400 units. This production level...
Easton Pump Company’s planned production for the year just ended was 18,400 units. This production level was achieved, and 20,700 units were sold. Other data follow: Direct material used $ 570,400 Direct labor incurred 270,480 Fixed manufacturing overhead 388,240 Variable manufacturing overhead 178,480 Fixed selling and administrative expenses 309,120 Variable selling and administrative expenses 107,640 Finished-goods inventory, January 1 3,200 units The cost per unit remained the same in the current year as in the previous year. There were no...
Altoona Valve Company’s planned production for the year just ended was 18,300 units. This production level...
Altoona Valve Company’s planned production for the year just ended was 18,300 units. This production level was achieved, and 20,500 units were sold. Other data follow:      Direct material used $ 549,000   Direct labor incurred 287,310   Fixed manufacturing overhead 373,320   Variable manufacturing overhead 177,510   Fixed selling and administrative expenses 307,440   Variable selling and administrative expenses 92,415   Finished-goods inventory, January 1 3,100 units The cost per unit remained the same in the current year as in the previous year. There were...
Easton Pump Company’s planned production for the year just ended was 18,600 units. This production level...
Easton Pump Company’s planned production for the year just ended was 18,600 units. This production level was achieved, and 21,500 units were sold. Other data follow: Direct material used $ 569,160 Direct labor incurred 262,260 Fixed manufacturing overhead 405,480 Variable manufacturing overhead 176,700 Fixed selling and administrative expenses 327,360 Variable selling and administrative expenses 97,650 Finished-goods inventory, January 1 3,900 units The cost per unit remained the same in the current year as in the previous year. There were no...
Harris Company has a current production level of 20,000 units per month. Unit costs at this...
Harris Company has a current production level of 20,000 units per month. Unit costs at this level are: Direct materials $0.25 Direct labor 0.40 Variable overhead 0.15 Fixed overhead 0.20 Marketing - fixed 0.20 Marketing/distribution - variable 0.40 Current monthly sales are 18,000 units. Jimi Company has contacted Harris Company about purchasing 1,500 units at $2.00 each. Current sales would not be affected by the one-time-only special order, and variable marketing/distribution costs would not be incurred on the special order....
Compute the cost per equivalent unit for direct materials and conversion for the month.
Perrette Motor Company rebuilds automobile engines that have been damaged or are in need of extensive repair. The rebuilt engine has a 100,000-mile warranty and is purchased by auto shops, large motor pools in companies and governmental units, and some individual auto owners. The plant in Dayton, Ohio, specializes in the Ford V6 engine. Approximately 1,140 to 1,340 engines are rebuilt each month, and the costs of the plant are assigned to monthly production using weighted-average process costing. The current...
The cost per equivalent units of direct materials and conversion in the Bottling Department of Beverages...
The cost per equivalent units of direct materials and conversion in the Bottling Department of Beverages on Jolt Company is $0.50 and $0.10, respectively. The equivalent units to be assigned costs are as follows: Direct Materials Conversion Inventory in process, beginning of period 0 3,300 Started and completed during the period 56,980 56,980 Transferred out of Bottling (completed) 56,980 60,280 Inventory in process, end of period 3,990 2,500 Total units to be assigned costs 60,970 62,780 The beginning work in...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT