Question
In: Accounting
The Zurich Chocolate Company uses standard cost in the manufacture of its line of fine chocolates....
The Zurich Chocolate Company uses standard cost in the manufacture of its line of fine chocolates. Operating data for the past week is summarize as follows:
Standard Cost Card – per box:
Direct materials, .5 kg at $16 per
kg. $ 8.00
Direct labor, 1.5 hours at
$15/hour 22.50
Variable overhead, 1.5 hours at
$10/hour 15.00
Standard cost per unit
$45.50
The company produced 4,000 boxes of chocolates. Direct materials purchased were 2,150 kg. of chocolate at $15.50 per kg. Direct materials used to produce 4,000 boxes of chocolates were 2,120 kg of chocolate. The company records showed no beginning or ending inventories of the year.
Actual direct labor costs were 6,400 hours at $16.00 per hour.
Actual variable overhead was $69,500 and variable overhead is applied using direct labor hours.
Required:
1. Compute the direct materials price and quantity
variances for the year indicating if they are favorable or
unfavorable. Compute the direct labor rate variance and efficiency
variances for the year indicating if they are favorable or
unfavorable.
2. Compute the variable overhead spending and
efficiency variances for the year indicating if they are favorable
or unfavorable. Give one possible explanation that would explain
the following three variances; direct material price variance,
direct labor efficiency variance, variable overhead efficiency
variance.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
DC Electronics uses a standard part in the manufacture of several of its radios. The cost...
DC Electronics uses a standard part in the manufacture
of several of its radios. The cost of producing 30,000 parts is
$90,000, which includes fixed costs of $33,000 and variable costs
of $57,000. By outsourcing the part, the company can avoid 30% of
the fixed costs.
If DC Electronics buys the part, what is the most DC
Electronics can spend per unit so that operating income equals the
operating income from making the part?
a.
$3.00
b.
$2.67
c.
$2.23...
The Lancaster Chocolates Company produces Chocolate. The first process is to refine the chocolate into syrup...
The Lancaster Chocolates Company produces Chocolate. The first
process is to refine the chocolate into syrup in a joint costing
process at a cost of $540,000. Then the Chocolate is split off into
which produces three separate products: A Bars, B Bits, and C Grade
Syrup (no further processing required.) A Bars for from the Syrup
Department to be processed further in the molding department with a
cost of $120,000. B Bits go from the Syrup Department to be
processed...
Fine Oak Furniture manufactures high-quality wooden desks and uses a standard cost system. A standard cost...
Fine Oak Furniture manufactures high-quality wooden desks and
uses a standard cost system. A standard cost card for one model of
desk, the “heritage”, developed for 2019, is shown below:
Standard Cost per Unit:
Model: Heritage
Standard
Standard
Standard
Quantity
Price/Rate
Cost
Direct Materials
75
BF x
$ 0.45
per BF
=
$33.75
Direct Labour
1.25
Hrs x
$18.00
per Hr
=
$22.50
Variable Manufacturing Overhead
1.25
Hrs x
$4.00
per Hr
=
$5.00
Fixed Manufacturing Overhead
1.25
Hrs x...
Fine Oak Furniture manufactures high-quality wooden desks and uses a standard cost system. A standard cost...
Fine Oak Furniture manufactures high-quality wooden desks and
uses a standard cost system. A standard cost card for one model of
desk, the “heritage”, developed for 2019, is shown below:
Standard Cost per Unit:
Model: Heritage
Standard
Standard
Standard
Quantity
Price/Rate
Cost
Direct Materials
75
BF x
$ 0.45
per BF
=
$33.75
Direct Labour
1.25
Hrs x
$18.00
per Hr
=
$22.50
Variable Manufacturing Overhead
1.25
Hrs x
$4.00
per Hr
=
$5.00
Fixed Manufacturing Overhead
1.25
Hrs x...
Best Bicycles Inc uses a standard part in the manufacture of several of its bikes. The...
Best Bicycles Inc uses a standard part in the manufacture of
several of its bikes. The cost of producing 43,000 parts is
$140,000, which includes fixed costs of $68,000 and variable costs
of $72,000. The company can buy the part from an outside supplier
for $3.80 per unit, and avoid 30% of the fixed costs. If Best
Bicycles makes the part, how much will its operating income be?
A) $71,000 less than if the company bought the part
B) $88,400...
The Leonard Company uses standard costs in its factory. The standard cost to produce one unit...
The Leonard Company uses standard costs in its
factory. The standard cost to produce one unit is as
follows:
Direct materials (1 g ×
$32/g)
$32
Direct labor (1.5 hours x $20 per
hour)
30
Variable overhead (1.5 direct labour hours x $10 per
hour) 15
Fixed Overhead (1.5 direct labour hours x $16 per
hour) 24
$101
Standards are based on normal monthly production involving 9,000
direct labor hours...
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...
The Delcarmen Company uses standard costing in its manufacturing plant for auto parts. The standard cost...
The Delcarmen Company uses standard costing in its manufacturing
plant for auto parts. The standard cost of a particular auto part,
based on a denominator level of 4,500 output units per year,
included 5 machine-hours of variable manufacturing overhead at $7
per hour and 5 machine-hours of fixed manufacturing overhead at
$14 per hour. Actual output produced was 5,100 units. Variable
manufacturing overhead incurred was $255,000. Fixed manufacturing
overhead incurred was $380,000. Actual machine-hours were
28,500.
requirements
1.
Prepare an...
Africa Ltd manufacture tennis racquets. The company uses the job costing system to cost its production....
Africa Ltd manufacture tennis racquets. The company uses the job
costing system to cost its production. The following information
relates to Poma Africa Ltd for the month of April 2020:
Schedule of costs relating to jobs in process as at 31 March
2020
Job
Direct Material
Direct Labour
Overheads
Total
A33
1050
2100
315
3465
C23
3300
5900
920
10120
Schedule of costs incurred on jobs during April 2020
Job (no of units)
Direct Material
Direct Labour
A33 (20 recquets)...
Cardinal Company has determined the following standard cost data necessary to manufacture one unit of its...
Cardinal Company has determined the following standard cost data
necessary to manufacture one unit of its primary product:
Direct Materials….. (6 pounds @ $20)
Direct Labor…………. .(8 hours @ $15)
During 20X1, Cardinal produced only 1 unit of product. This unit
required 7 pounds of direct material (a total of 8 pounds were
purchased at a cost of $18 per pound). In addition, total payroll
costs for direct labor during 20X1 were $130 (10 hours @ $13 per
hour).
Required:...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Explain how advances in technology can force a software subsystem to undergo change or run the...
- Discuss whether you agree or disagree on whether you think E-mails need to be managed and...
- b. Do any unions represent employees in Microsoft? Describe which unions are involved. c. Have there been...
- Look up and use each of these Linux commands. (Each command will have two parts) Summarize...
- What was Lincoln 10 percent plan and what problems did it present?
- A cantilever beam 4m long carries a uniform load of 3.5 kN/m over a portion 1.5m...
- Our next optimization comes from using the brilliant Rabin-Karp substring matching algorithm (RK for short), invented...
ADVERTISEMENT