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J&W Corporation manufactures a new electronic game console. The current standard cost sheet for a game...

J&W Corporation manufactures a new electronic game console. The current standard cost sheet for a game console follows:

Direct materials, ? kilograms at $6 per kilogram $ ? per game
Direct labor, 0.75 hours at ? per hour ? per game
Overhead, 0.75 hours at ? per hour ? per game
Total costs $ 39 per game

Assume that the following data appeared in J&W’s records at the end of the past month:

Actual production 44,000 units
Actual sales 41,000 units
Materials (120,500 kilograms) $ 188,700
Materials price variance 47,000 U
Materials efficiency variance 23,400 U
Direct labor price variance 18,600 U
Direct labor (31,000 hours) 533,200
Underapplied overhead (total) 18,800 U

There are no materials inventories.

Required:

a. Complete the standard cost sheet for a game console given below. Compute the direct labor efficiency variance. (Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

Direct Materials ____ Kilograms at $6 per kilogram _____ per game

Direct labor, .75 hours at_____ per hour_____ per game

Overhead, .75 hours at_______ per hour _____ per game

Direct Labor:

Effiencey _____ _____

Solutions

Expert Solution

1)Material efficiency variance =SR[SQ-AQ]

    -23400 = $6[SQ-120500]

-3900=SQ-120500

SQ=116600 Kg

Standard quantity per unit produced = 116600/44000 = 2.65 Kg/ game

standard material cost per unit = $6* 2.65 kg=$15.9/game

2)Labor price variance = Actual Hour ( SR-AR)

         -18600 = 31000 [SR -$17.20]

-0.6=SR-17.20

SR=$16.60

AR=$17.20

standard Labor cost per Unit= $16.60*.75 =$ 12.45 per game

3)overhead cost per game =Total cost per game -material cost per game -labor cost per game

             = $39-$15.90-$12.45=$10.65

Overhead cost per hour = $10.65/0.75 = $ 14.90

a)Standard Cost Sheet

Direct material 2.65 kg at $ 6   

$15.90

Direct labor 0.75 hours at $16.60

$ 12.45

Overhead

$ 10.65

Total cost

$39

Labor efficiency variance =SR[SH-AH]
= 16.60 (33000-31000) = $ 33200

                = $17.60 [(58000*0.75)- 41000]

= $44000 F

ekkarill92 answered 1 year ago
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