In: Accounting
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 |