Question

In: Accounting

Elements of Labor and Variable Overhead Variances Chelsea Fabricating applies variable overhead to products on the...

Elements of Labor and Variable Overhead Variances
Chelsea Fabricating applies variable overhead to products on the basis of standard direct labor hours. Presented is selected information for last month when 10,000 units were produced.

Required
Solve for items "a" through "h."

Do not round answers for items b. (standard hours/unit).

Direct labor Variable overhead
Actual a. $Answer f. $Answer
Standard hours/unit b. $Answer b.$Answer
Actual hours (total) 6,200 6,200
Standard rate/hour $36.00 $24.00
Actual rate $37.80
Flexible budget $90,000 $60,000
Labor rate or variable overhead spending variance c. $Answer AnswerUF g. $Answer AnswerUF
Efficiency variances d. $Answer AnswerUF h. $Answer AnswerUF
Total flexible budget variance e. $Answer AnswerUF $2,500 F

Solutions

Expert Solution

Req A:
Actual Labour cost (Actual hours*Actual rate) 234360
(6200 hours*$37.80)
Req b:
Flexible Budget (Total Std cost) $90,000
Std rate per hour 36
Std Hours alloedd ($ 90,000 /36) 2500 Hours
Req C:
Labour rate variance = Actual hours (Std rate-Actual rate)
6200 hours (36.00-37.80)= $11,160 U
Req d:
Efficiency Variance= Std rate (Std hours-Actual hours)
36.00 (2500-6200)= $133,200 U
Req e
Total Flexible Budget Variancce= Std labour cost -Actual labour ccost
90,000 -234360 = $144,360
Req f:
Std Variable OH cost (Flexible budget): $ 60,000
Flexible budget variane: $ 2500 F
Flexible budget variance= Std variable OH cost -Actual variable cost
2500 = 60,000 - Actual Variable OH cost
Actual Variable Oh cost = $57,500
Req b: Std Variable OH cost: $ 60,000
Std rate per hour: $ 24
Std Hours: (60,000/24):; 2500 hours
Req g:
Variable Oh rate variance= Aactual hours (Std OH rate-Actual Oh rate)
6200 hours *24- $ 57500 =91300 F
Req h:
Variable OH efficeincy variance= Std OH rate (Std hours-Actual hours)
24.00 (2500-6200)= $ 88,800 U

Related Solutions

Organizations determine standard costs for labor, materials, and overhead. Discuss variances for labor, materials, and overhead....
Organizations determine standard costs for labor, materials, and overhead. Discuss variances for labor, materials, and overhead. How do these variances differ from the standard costs? How is each computed? Why is calculating variances useful to an organization? Please help answer: How do these variances differ from the standard costs?
Organizations determine standard costs for labor, materials, and overhead. Discuss variances for labor, materials, and overhead....
Organizations determine standard costs for labor, materials, and overhead. Discuss variances for labor, materials, and overhead. How do these variances differ from the standard costs? How is each computed? Why is calculating variances useful to an organization?
Material, Labor, and Variable Overhead Variances The following summarized manufacturing data relate to Kiosse Corporation’s May...
Material, Labor, and Variable Overhead Variances The following summarized manufacturing data relate to Kiosse Corporation’s May operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours. Standard Units Costs Total Actual Costs Direct material Standard (3 lb. @ $2.00/lb.) $6 Actual (6,200 lb. @ $2.20/lb.) $13,640 Direct labor Standard (0.5 hr. @ $14/hr.) $7 Actual (980 hrs. @ $13.70/hr.) 13,426 Variable overhead Standard (0.5 hr. @ $4/hr.) $2 Actual - 4,200 Total...
The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The...
The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The standard cost card shows that 12 direct labor-hours are required per unit of product. For August, the company budgeted to work 360,000 direct labor-hours and to incur the following total manufacturing overhead costs: Total fixed overhead costs $475,200 Total variable overhead costs $396,000 During August, the company completed 28,000 units of product, worked 344,000 direct labor-hours, and incurred the following total manufacturing overhead costs:...
Johnson Company applies overhead to products using direct labor hours as the activity level. During 2019,...
Johnson Company applies overhead to products using direct labor hours as the activity level. During 2019, Johnson Company had the following estimated costs: Direct materials .................... $278,000 Direct labor ........................ 255,000 (15,000 hours expected) Advertising ......................... 37,000 Rent on factory building ............ 38,000 Depreciation .................... ... 60,000 Indirect materials .................. 20,000 Sales commissions ................... 40,000 Production supervisor's salary ...... 50,000 Insurance on factory equipment ...... 18,000 CEO's salary ........................ 95,000 The following additional information is available: 1. 30% of the...
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost....
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost. ABC Company's accounting records for 2019 indicated the following costs had been incurred: Direct materials purchased ................... $122,000 Depreciation, factory equipment .............. 33,000 Direct labor ................................. ? Utilities..................................... ? Sales commissions............................. 52,000 Indirect materials............................ 11,000 Depreciation, office equipment ............... ? Production supervisor's salary ............... 57,000 Advertising................................... 66,000 60% of the utilities relate to the factory while 40% of the utilities relate to the general...
Jackson Company applies overhead to products using a pre determined rate of $12.10 per direct labor...
Jackson Company applies overhead to products using a pre determined rate of $12.10 per direct labor hour. During 2019, Jackson Company began work on three jobs. Information relating to these three jobs appears below: Job #359 Job #360 Job #361 direct materials ....... $98,000 $75,000 $91,000 direct labor cost ...... $95,200 $79,900 $69,700 direct labor hours ..... 5,600 4,700 4,100 By the end of 2019, job #359 and job #361 had been completed. Job #360 was not completed by the...
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost....
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost. ABC Company's accounting records for 2019 indicated the following costs had been incurred: Direct materials purchased ................... $122,000 Depreciation, factory equipment .............. 33,000 Direct labor ................................. ? Utilities..................................... ? Sales commissions............................. 52,000 Indirect materials............................ 11,000 Depreciation, office equipment ............... ? Production supervisor's salary ............... 57,000 Advertising................................... 66,000 60% of the utilities relate to the factory while 40% of the utilities relate to the general...
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost....
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost. ABC Company's accounting records for 2019 indicated the following costs had been incurred: Direct materials purchased ................... $122,000 Depreciation, factory equipment .............. 33,000 Direct labor ................................. ? Utilities..................................... ? Sales commissions............................. 52,000 Indirect materials............................ 11,000 Depreciation, office equipment ............... ? Production supervisor's salary ............... 57,000 Advertising................................... 66,000 60% of the utilities relate to the factory while 40% of the utilities relate to the general...
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost....
ABC Company applies overhead to products using a pre-determined rate of 125% of direct labor cost. ABC Company's accounting records for 2019 indicated the following costs had been incurred: Direct materials purchased ................... $122,000 Depreciation, factory equipment .............. 33,000 Direct labor ................................. ? Utilities..................................... ? Sales commissions............................. 52,000 Indirect materials............................ 11,000 Depreciation, office equipment ............... ? Production supervisor's salary ............... 57,000 Advertising................................... 66,000 60% of the utilities relate to the factory while 40% of the utilities relate to the general...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT