Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor Haversham Corporation produces dress shirts....

Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor

Haversham Corporation produces dress shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt):

Fabric (1.5 yds. @ $2.80)	$4.20
Direct labor (1.1 hr. @ $20)	22.00
Total prime cost	$26.20

During the year, Haversham produced 9,900 shirts. The actual fabric purchased was 14,750 yards at $2.74 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 11,010 hours at $19.50 per hour.

Required:

1. Compute the costs of fabric and direct labor that should have been incurred for the production of 9,900 shirts.

Direct materials	$fill in the blank 0e3850fbb03b03f_1
Direct labor	$fill in the blank 0e3850fbb03b03f_2

2. Compute the total budget variances for direct materials and direct labor.

Direct materials	$fill in the blank 0e3850fbb03b03f_3
Direct labor	fill in the blank 0e3850fbb03b03f_5

3. Break down the total budget variance for direct materials into a price variance and a usage variance.

Materials Price Variance	$fill in the blank 0e3850fbb03b03f_7
Materials Usage Variance	$fill in the blank 0e3850fbb03b03f_9

Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "0".

Price Variance	fill in the blank 521dbb03efc2fe6_2	fill in the blank 521dbb03efc2fe6_3
	fill in the blank 521dbb03efc2fe6_5	fill in the blank 521dbb03efc2fe6_6
	fill in the blank 521dbb03efc2fe6_8	fill in the blank 521dbb03efc2fe6_9
Usage Variance	fill in the blank 521dbb03efc2fe6_11	fill in the blank 521dbb03efc2fe6_12
	fill in the blank 521dbb03efc2fe6_14	fill in the blank 521dbb03efc2fe6_15
	fill in the blank 521dbb03efc2fe6_17	fill in the blank 521dbb03efc2fe6_18

4. Break down the total budget variance for direct labor into a rate variance and an efficiency variance.

Labor Rate Variance	$fill in the blank 65c423fcffa2f7f_1
Labor Efficiency Variance	$fill in the blank 65c423fcffa2f7f_3

Prepare the journal entries associated with these variances. If an amount box does not require an entry, leave it blank or enter "0".

		fill in the blank ea46ee0cb02afba_2	fill in the blank ea46ee0cb02afba_3
		fill in the blank ea46ee0cb02afba_5	fill in the blank ea46ee0cb02afba_6
		fill in the blank ea46ee0cb02afba_8	fill in the blank ea46ee0cb02afba_9
		fill in the blank ea46ee0cb02afba_11	fill in the blank ea46ee0cb02afba_12

Solutions

Expert Solution

Solution:

ekkarill92 answered 5 months ago

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