Direct Materials and Direct Labor Variance Analysis
Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 70 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:
| Standard wage per hr. | $13.80 |
| Standard labor time per faucet | 10 min. |
| Standard number of lb. of brass | 1.90 lb. |
| Standard price per lb. of brass | $12.50 |
| Actual price per lb. of brass | $12.75 |
| Actual lb. of brass used during the week | 15,300 lb. |
| Number of faucets produced during the week | 7,800 |
| Actual wage per hr. | $14.20 |
| Actual hrs. per week | 2,240 hrs. |
Required:
a. Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per faucet | $ |
| Direct labor standard cost per faucet | $ |
| Total standard cost per faucet | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Price variance | $ | |
| Quantity variance | $ | |
| Total direct materials cost variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Rate variance | $ | |
| Time variance | $ | |
| Total direct labor cost variance | $ |
In: Accounting
Direct Materials and Direct Labor Variance Analysis
Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows:
| Standard wage per hr. | $12.00 |
| Standard labor time per unit | 12 min. |
| Standard number of yds. of fabric per unit | 5.0 yds. |
| Standard price per yd. of fabric | $5.00 |
| Actual price per yd. of fabric | $5.10 |
| Actual yds. of fabric used during the week | 26,200 yds. |
| Number of units produced during the week | 5,220 |
| Actual wage per hr. | $11.80 |
| Actual hrs. for the week | 1,000 hrs. |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | $ |
| Total standard cost per unit | $ |
b. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Price variance | $ | |
| Quantity variance | $ | |
| Total direct materials cost variance | $ |
c. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Rate variance | $ | |
| Time variance | $ | |
| Total direct labor cost variance | $ |
In: Accounting
Direct Materials and Direct Labor Variance Analysis Best Faucet Company manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 70 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows: Standard wage per hour $12.6 Standard labor time per faucet 20 min. Standard number of lbs. of zinc 1.7 lbs. Standard price per lb. of zinc $10.5 Actual price per lb. of zinc $10.75 Actual lbs. of zinc used during the week 14,700 lbs. Number of faucets produced during the week 8,400 Actual wage per hour $13 Actual hours per week 2,520 hrs. Required: a. Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places. Direct materials standard cost per faucet $ Direct labor standard cost per faucet $ Total standard cost per faucet $ b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Price variance $ Quantity variance $ Total direct materials cost variance $ c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Rate variance $ Time variance $ Total direct labor cost variance $
In: Accounting
Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:
| Molding | Fabrication | Total | |||||
| Machine-hours | 21,000 | 32,000 | 53,000 | ||||
| Fixed manufacturing overhead cost | $ | 700,000 | $ | 280,000 | $ | 980,000 | |
| Variable manufacturing overhead cost per machine-hour | $ | 3.00 | $ | 1.00 | |||
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-70 and Job C-200. It provided the following information related to those two jobs:
| Job D-70 | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 370,000 | $ | 320,000 | $ | 690,000 |
| Direct labor cost | $ | 240,000 | $ | 140,000 | $ | 380,000 |
| Machine-hours | 16,000 | 5,000 | 21,000 | |||
| Job C-200 | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 280,000 | $ | 240,000 | $ | 520,000 |
| Direct labor cost | $ | 140,000 | $ | 240,000 | $ | 380,000 |
| Machine-hours | 5,000 | 27,000 | 32,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
Exercise 2-15 (Algo) Part 1
Required:
1. Assume Delph uses departmental predetermined overhead rates
based on machine-hours.
a. Compute the departmental predetermined overhead rates.
b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.
c. If Delph establishes bid prices that are 150% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200?
d. What is Delph’s cost of goods sold for the year?
In: Accounting
Best Faucet Company manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 60 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:
| Standard wage per hour | $13.8 |
| Standard labor time per faucet | 15 min. |
| Standard number of lbs. of zinc | 2.1 lbs. |
| Standard price per lb. of zinc | $9.5 |
| Actual price per lb. of zinc | $9.75 |
| Actual lbs. of zinc used during the week | 14,900 lbs. |
| Number of faucets produced during the week | 6,900 |
| Actual wage per hour | $14.2 |
| Actual hours per week | 2,400 hrs. |
Required:
a. Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per faucet | $ |
| Direct labor standard cost per faucet | $ |
| Total standard cost per faucet | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Price variance | $ | |
| Quantity variance | $ | |
| Total direct materials cost variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Rate variance | $ | |
| Time variance | $ | |
| Total direct labor cost variance | $ |
In: Accounting
[The following information applies to the questions
displayed below.]
Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:
| Molding | Fabrication | Total | |||||
| Machine-hours | 20,000 | 32,000 | 52,000 | ||||
| Fixed manufacturing overhead cost | $ | 740,000 | $ | 240,000 | $ | 980,000 | |
| Variable manufacturing overhead cost per machine-hour | $ | 5.00 | $ | 2.00 | |||
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-70 and Job C-200. It provided the following information related to those two jobs:
| Job D-70 | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 370,000 | $ | 320,000 | $ | 690,000 |
| Direct labor cost | $ | 200,000 | $ | 140,000 | $ | 340,000 |
| Machine-hours | 17,000 | 3,000 | 20,000 | |||
| Job C-200 | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 280,000 | $ | 260,000 | $ | 540,000 |
| Direct labor cost | $ | 160,000 | $ | 240,000 | $ | 400,000 |
| Machine-hours | 3,000 | 29,000 | 32,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
Required:
1. Assume Delph uses departmental predetermined overhead rates
based on machine-hours.
a. Compute the departmental predetermined overhead rates.
b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.
c. If Delph establishes bid prices that are 150% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200?
d. What is Delph’s cost of goods sold for the year?
In: Accounting
Direct Materials and Direct Labor Variance Analysis
Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows:
| Standard wage per hr. | $12.00 |
| Standard labor time per unit | 12 min. |
| Standard number of yds. of fabric per unit | 5.0 yds. |
| Standard price per yd. of fabric | $5.00 |
| Actual price per yd. of fabric | $5.10 |
| Actual yds. of fabric used during the week | 26,200 yds. |
| Number of units produced during the week | 5,220 |
| Actual wage per hr. | $11.80 |
| Actual hrs. for the week | 1,000 hrs. |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | |
| Total standard cost per unit | $ |
b. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct materials price variance | $ | |
| Direct materials quantity variance | ||
| Total direct materials cost variance | $ |
c. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct labor rate variance | $ | |
| Direct labor time variance | ||
| Total direct labor cost variance | $ |
In: Accounting
As CFO of Portobello Scuba Diving Inc. you are asked to look into the possibility of adopting a lockbox system to expedite cash receipts from clients. Portobello receives check remittances totaling $28 million in a year. The firm records and processes 15,000 checks in the same period. The National Bank of Brazil has informed you that it could provide the service of expediting checks and associated documents through the lockbox system for a unit cost of $0.30 per check. After conducting an analysis, you project that the cash freed up by the adoption of the system can be invested in a portfolio of near-cash assets that will yield an annual before-tax return of 10 percent. The company usually uses a 365-day year in its financial calculations.
a. What reduction in check collection time is necessary for Portobello to be neither better nor worse off for having adopted the lockbox system?
b. How would your solution to part (a) be affected if Portobello could invest the freed-up balances at an expected annual return of only percent?
In: Finance
The following table gives output for different numbers of workers for Shiny Sleeves, a producer of shirt varnish.
Shiny Sleeve’s wages are $20 per hour.
For each level of workers, calculate Shiny Sleeve’s total hourly wage cost.
Instructions: Enter Marginal Product and Wage Cost in whole numbers and Marginal Cost rounded to two decimal places.
For each jump between levels of workers and output, calculate Shiny Sleeve’s Marginal Product and Marginal Cost.
| workers | output/hour | marginal product | total cost wage | marginal cost |
| 1 | 10 | |||
| 2 | 18 | |||
| 3 | 24 | |||
| 4 | 28 |
In: Economics
A national chain of clothing goods stores recently sent shipments to the following stores. The number of items shipped to each store and their total wholesale cost is shown in the table below. Find the wholesale price of one of each item.
(A) cost of a pair of jeans is?
(B) cost of a jacket is?
(C) cost of a sweater is?
(D) cost of a shirt is?
|
JEANS |
JACKETS |
SWEATERS |
SHIRTS |
TOTAL COST |
|
|
Store A |
4000 |
3000 |
2100 |
4300 |
$512,275 |
|
Store B |
3600 |
2500 |
1900 |
4500 |
460,425 |
|
Store C |
5000 |
2000 |
1500 |
5500 |
474,875 |
|
Store D |
7000 |
1900 |
600 |
6000 |
505,300 |
In: Math