Question
In: Accounting
The following summary data relate to the operations of Beckett Company for July, during which 12,000...
The following summary data relate to the operations of Beckett Company for July, during which 12,000 finished units were produced: Direct material: Standard (0.8 lb. @ $6.00/lb.) Actual (8,500 lb. @ $6.25/lb.) Direct labor: Standard (1 hr. @ $16.00/hr.) Actual (12,700 hrs. @ $15.60/hr.) Variable overhead: Standard (1 hr. @ $10.00/hr.) Actual ($121,000) Required: Compute the following variances and indicate whether each is favorable (F) or unfavorable (U). 1. Materials price variance 2. Materials efficiency variance 3. Labor rate variance 4. Labor efficiency variance 5. Variable overhead spending variance 6. Variable overhead efficiency variance
Solutions
Expert Solution
| 1 | Materials price variance | $2125 | Unfavorable |
| (AQ x AP) - (AQ x SP) = (8500 x $6.25) - (8500 x $6.00) = $2125 | |||
| 2 | Materials efficiency variance | $6600 | Favorable |
| (AQ x SP) - (SQ x SP) = (8500 x $6.00) - (9600 x $6.00) = $-6600 | |||
| SQ = 12000 units x 0.8 lb. = 9600 lb. | |||
| 3 | Labor rate variance | $5080 | Favorable |
| (AH x AR) - (AH x SR) = (12700 x $15.60) - (12700 x $16.00) = $-5080 | |||
| 4 | Labor efficiency variance | $11200 | Unfavorable |
| (AH x SR) - (SH x SR) = (12700 x $16.00) - (12000 x $16.00) = $11200 | |||
| SH = 12000 units x 1 hour = 12000 hours | |||
| 5 | Variable overhead spending variance | $6000 | Favorable |
| (AH x AR) - (AH x SR) = $121000 - (12700 x $10.00) = $-6000 | |||
| 6 | Variable efficiency variance | $7000 | Unfavorable |
| (AH x SR) - (SH x SR) = (12700 x $10.00) - (12000 x $10.00) = $7000 |
ekkarill92 answered 2 years agoRelated Solutions
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Accounts receivable
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Inventory
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The gross margin is 25% of
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Actual and budgeted sales
data:
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$62,000
April
$78,000
May
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June
$108,000
July
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The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:...
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Current assets as of March 31:
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Accounts receivable $
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Inventory $
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Building and equipment, net $
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Accounts payable $
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Common stock $
150,000
Retained earnings $
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May $ 73,000
June $ 98,000
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Accounts receivable
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Inventory
$
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Building and equipment, net
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Accounts payable
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Common stock
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Retained earnings
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The gross margin is 25% of sales.
Actual and budgeted sales data:
March (actual)
$
53,000
April
$
69,000
May
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74,000
June
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99,000
July
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Accounts receivable
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Inventory
$
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Building and equipment, net
$
130,800
Accounts payable
$
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Common stock
$
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Retained earnings
$
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The gross margin is 25% of sales.
Actual and budgeted sales data:
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$
53,000
April
$
69,000
May
$
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June
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July
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Accounts receivable
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Inventory
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Building and equipment, net
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$
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April
$
75,000
May
$
80,000
June
$
105,000
July
$
56,000
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of consumer goods:
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Accounts
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$
25,600
Inventory
$
48,000
Building and
equipment, net
$
111,600
Accounts
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$
28,800
Common
stock
$
150,000
Retained
earnings
$
15,300
The gross margin is
25% of sales.
Actual and budgeted
sales data:
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(actual)
$
64,000
April
$
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May
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June
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110,000
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Accounts receivable
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Inventory
$
40,800
Building and equipment, net
$
129,600
Accounts payable
$
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Common stock
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150,000
Retained earnings
$
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Actual and budgeted sales data:
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52,000
April
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May
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June
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July
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relate to the operations of Shilow Company, a wholesale distributor
of consumer goods:
Current assets as of March 31:
Cash
$
8,900
Accounts
receivable
$
25,600
Inventory
$
48,000
Building and
equipment, net
$
111,600
Accounts
payable
$
28,800
Common
stock
$
150,000
Retained
earnings
$
15,300
The gross margin is
25% of sales.
Actual and budgeted
sales data:
March
(actual)
$
64,000
April
$
80,000
May
$
85,000
June
$
110,000
July
$
61,000
Sales are...
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