Question
In: Accounting
Top Hand company makes a tote bag and uses a standard cost system. Each tote bag...
Top Hand company makes a tote bag and uses a standard cost system. Each tote bag should use 2 yards of material that costs $5.00 per yard. Stitching on each bag should take a half hour of labor time of line workers who are paid an average wage of $20 per hour. Last month 15,000 tote bags were produced.
Looking at the production records, you find that $144,000 was spent to purchase the 32,000 yards of material used in production. Stitchers worked 7,200 hours and were paid $158,400.
You have been asked to produce a production report.
Required: Be sure to label each variance as F – favorable or U – unfavorable.
1. What is the standard materials costs for a tote bag and what is the standard labor cost to produce a tote bag?
2. What were the total direct materials and direct labor variances?
3. Calculate the following variance breakdowns for last month’s production:
Materials price variance
Materials usage variance
Labor price (rate) variance
Labor usage (efficiency) variance
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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...
Wallis Company manufactures only one product and uses a standard cost system. The company uses a...
Wallis Company manufactures only one product and uses a standard
cost system. The company uses a predetermined plantwide overhead
rate that relies on direct labor-hours as the allocation base. All
of the company's manufacturing overhead costs are fixed—it does not
incur any variable manufacturing overhead costs. The predetermined
overhead rate is based on a cost formula that estimated $2,892,000
of fixed manufacturing overhead for an estimated allocation base of
289,200 direct labor-hours. Wallis does not maintain any beginning
or ending...
Phoenix Company manufactures only one product and uses a standard cost system. The company uses a...
Phoenix Company manufactures only one product and uses a
standard cost system. The company uses a plantwide predetermined
overhead rate that relies on direct labor-hours as the allocation
base. The predetermined overhead rate is based on a cost formula
that estimated $2,887,200 of fixed and variable manufacturing
overhead for an estimated allocation base of 240,600 direct
labor-hours. Phoenix does not maintain any beginning or ending work
in process inventory.
The company’s beginning balance sheet is as follows:
Phoenix Company
Balance...
Wallis Company manufactures only one product and uses a standard cost system. The company uses a...
Wallis Company manufactures only one product and uses a standard
cost system. The company uses a predetermined plantwide overhead
rate that relies on direct labor-hours as the allocation base. All
of the company's manufacturing overhead costs are fixed—it does not
incur any variable manufacturing overhead costs. The predetermined
overhead rate is based on a cost formula that estimated $2,886,000
of fixed manufacturing overhead for an estimated allocation base of
288,600 direct labor-hours. Wallis does not maintain any beginning
or ending...
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...
West Manufacturing Company uses a standard cost system in its accounting records. The standard costs for...
West Manufacturing Company uses a standard cost system in its
accounting records. The standard costs for its one product are as
follows:
Materials
8 pounds at $1.00 = $ 8.00
Direct
labor
1.2 hours at $14.00 = 16.80
Variable overhead 1.2 direct-labor hours at
$4.00 = 4.80
Fixed overhead 1.2
direct-labor hours at $6.00 =
7.20
Total standard
cost
$36.80
The standard costs per unit are based on normal capacity of 3,600
direct-labor...
Griffen Company makes pipe using metal. The company uses a standard costing system. Variable overhead is...
Griffen Company makes pipe using metal. The company uses a
standard costing system. Variable overhead is allocated on the
basis of direct material usage (pounds). Overhead is allocated to
units based on expected production of 12,000 units. Griffen
maintains a materials inventory, so the amount of material used is
not necessarily the same as the amount of material purchased in any
one month. The standard cost sheet for a unit of pipe follows.
Direct material 6 pounds @ $ 5...
The Rogers Company uses a standard cost accounting system and estimates production for the year to...
The Rogers Company uses a standard cost accounting system and
estimates production for the year to be 60,000 units. At this
volume, the company's variable overhead costs are $0.50 per direct
labor hour.
The company's single product has a standard cost of $30.00 per
unit. Included in the $30.00 is $13.20 for direct materials (3
yards) and $12.00 of direct labor (2 hours). Production information
for the month of March follows:
Number of units produced
6,000
Materials purchased (18,500 yards)...
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