Question
In: Accounting
Spiro Company manufactures molded candles that are finished by hand. The company developed the following standards...
Spiro Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles:
Amount of direct materials per candle: 1.6 pounds
Price of direct materials per pound: $1.5
Quantity of labor per unit: 1 hour
Price of direct labor per hour: $20/hour
Total budgeted fixed overhead: $390,000
During 2017, Spiro planned to produce 30,000 drip candles. Production lagged behind expectations, and it actually produced only 24,000 drip candles. At year-end, direct materials purchased and used amounted to 40,000 pounds at a unit price of $1.35 per pound. Direct labor costs were actually $18.75 per hour and 26,400 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $330,000. Overhead is applied to products using a predetermined overhead rate based on estimated units.
Round all computations to two decimal places.
a. Compute the standard cost per candle for direct materials, direct labor, and overhead.
b. Determine the total standard cost for one drip candle.
c. Compute the actual cost per candle for direct materials, direct labor, and overhead.
d. Compute the total actual cost per candle.
e. Compute the price and usage variances for direct materials and direct labor. Identify any variances that Spiro should investigate. Offer possible cause(s) for the variances.
f. Compute the fixed cost spending and volume variances. Explain your findings.
g. Although the individual variances (price, usage, and overhead) were large, the standard cost per unit and the actual cost per unit differed by only a few cents. Explain why.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Benson Company manufactures molded candles that are finished by hand. The company developed the following standards...
Benson Company manufactures molded candles that are finished by
hand. The company developed the following standards for a new line
of drip candles:
Amount of direct materials per candle
1.30
pounds
Price of direct materials per pound
$
0.60
Quantity of labor per unit
0.80
hours
Price of direct labor per hour
$
9.00
/hour
Total budgeted fixed overhead
$
107,100
During 2017, Benson planned to produce 21,000 drip candles.
Production lagged behind expectations, and it actually produced
only 15,000...
Benson Company manufactures molded candles that are finished by hand. The company developed the following standards...
Benson Company manufactures molded candles that are finished by
hand. The company developed the following standards for a new line
of drip candles:
Amount of direct materials per candle
1.70
pounds
Price of direct materials per pound
$
0.60
Quantity of labor per unit
1.10
hours
Price of direct labor per hour
$
8.00
/hour
Total budgeted fixed overhead
$
159,100
During 2017, Benson planned to produce 37,000 drip candles.
Production lagged behind expectations, and it actually produced
only 30,000...
The Schuyler Corporation manufactures lamps. It has set up the following standards per finished unit for...
The Schuyler Corporation manufactures lamps. It has set up the
following standards per finished unit for direct materials and
direct manufacturing labor:
Direct materials: 10 lb. at $4.60 per lb.
$46.00
Direct manufacturing labor: 0.5 hour at $30 per hour
15.00
The number of finished units budgeted for January 2017 was
9,650; 9,600 units were actually produced.
Actual results in January
20172017
were as follows:
Direct materials: 94,500 lb. used
Direct manufacturing labor: 4,600 hours
$144,900
Assume that there was...
29) The Tulip Company makes mugs for which the following standards have been developed: &nbs
29) The Tulip Company makes mugs for which the following
standards have been developed:
Standard
Inputs
Expected Standard
Price Expected
For
Each Unit of
Output Per
Unit of Input
Direct
Materials 5
ounces $2
per ounce
Direct
Labor 2.5
hours $8
per hour
Production of 400 mugs was expected in August, but 440 mugs were
actually completed. Direct materials purchased and used were 2,100
ounces at an actual price of $2.20 per ounce. Direct labor cost for
the month was $5,310, and the actual pay per...
Biscuit Company has developed the following standards for one of its products. Direct labor hours is...
Biscuit Company has developed the following standards for one of
its products. Direct labor hours is the driver used to assign
overhead costs to products.
Direct materials:
10 pounds × $3 per pound
Direct labor:
2.5 hours × $8 per hour
Variable manufacturing overhead:
2.5 hours × $2 per hour
The following activity occurred during the month of
June:
Materials purchased:
125,000 pounds at $2.60 per pound
Materials used:
110,000 pounds
Units produced:
10,000 units
Direct labor:
24,000 hours at...
IOL Ltd manufactures ceramic lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labour:
IOL Ltd manufactures ceramic lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labour:
Direct materials: 10 kg at $4.50 per kg
$45.00
Direct manufacturing labour: 0.5 hours at $30 per hour
15.00
The number of finished units budgeted for January was 5 000; 4 550 units were actually produced.
Actual results in January were:
Direct materials: 45 055 kg used
Direct manufacturing labour: 2 250 hours
$70 875
Assume...
Barbaro Production Company has developed the following standards for one of its products: STANDARD VARIABLE COST...
Barbaro Production Company has developed the following standards
for one of its products:
STANDARD VARIABLE COST CARD
One Unit of Product
Materials: 30 square feet × $5 per square foot $150.00
Direct labor: 16 hours × $7 per hour 112.00
Variable manufacturing overhead: 16 direct labor hours × $5 per
hour 80.00
Total standard variable cost per unit $342.00
The company records materials price variances at the time of
purchase. The following activity occurred during the month of
April:
Materials...
Clean Water manufactures a water filter system. The cost standards developed by Clean Water appear below....
Clean Water manufactures a water filter system. The
cost standards developed by Clean Water appear below. Manufacturing
overhead at Clean Water is applied to production based on standard
direct labor-hours:
Standard quantity per system
Standard cost per Kilogram or hour
Standard cost per system
Direct materials
4 Kilograms
$3.25
$13.00
Direct labor
1.4 hours
$11.00
15.40
Variable overhead
1.4 hours
$4.00
5.60
Fixed overhead
1.4 hours
$6.00
8.40
Total standard cost per sucker
$42.40
The standards above were based...
Copper Bottom Pot Company manufactures one product, The Big Pot. The company has the following standards...
Copper Bottom Pot Company manufactures one product, The Big Pot.
The company has the following standards per unit for the The Big
Pot:
Standard quantity Standard price Standard cost
Direct materials 6.0 KGs $14 per KG $84
Direct labour 1.5 Hours $20 per hour $30
The following is recorded by the company for The Big Pot for
January 2020:
The company produced 600 units during the month
A total of 4000 KGS of material were purchased at a cost of...
Sharp Company manufactures a product for which the following standards have been set: Standard Quantity or...
Sharp Company manufactures a product for which the following
standards have been set:
Standard Quantity
or Hours
Standard Price
or Rate
Standard
Cost
Direct materials
3
feet
$
5
per foot
$
15
Direct labor
?
hours
?
per hour
?
During March, the company
purchased direct materials at a cost of $45,210, all of which were
used in the production of 2,500 units of product. In addition,
4,100 hours of direct labor time were worked on the product during...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
- In the article from Forbes notes that the goal of a leader is not to clone...
- Many people keep time using a 24 hour clock (11 is 11am and 23 is 11pm,...
- UNIX ONLY -- DIFFICULT LAB ASSIGNMENT This is an extremely difficult subject for me. Could you...
ADVERTISEMENT