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8 39 Review of Chapters 7 and 8 3-variance analysis CPA adapted The Beal Manufacturing Company’scosting system has two direct-cost categories direct materials and direct manufacturing labor

8-39 Review of Chapters 7 and 8, 3-variance analysis. (CPA, adapted) The Beal Manufacturing Company’scosting system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturingoverhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing laborhours(DLH). At the beginning of 2012, Beal adopted the following standards for its manufacturing costs:The denominator level for total manufacturing overhead per month in 2012 is 40,000 direct manufacturinglabor-hours. Beal’s flexible budget for January 2012 was based on this denominator level. The records forJanuary indicated the following:Direct materials purchasedDirect materials usedDirect manufacturing labor .Total actual manufacturing overhead (variable and fixed)Actual production25,000 lb. at $5.20 per lb.23,100 lb.40,100 hrs. at $14.60 per hr$600,0007,800 output units1. Prepare a schedule of total standard manufacturing costs for the 7,800 output units in January 2012.2. For the month of January 2012, compute the following variances, indicating whether each is favorable (F)or unfavorable (U):a. Direct materials price variance, based on purchasesb. Direct materials efficiency variancec. Direct manufacturing labor price varianced. Direct manufacturing labor efficiency variancee. Total manufacturing overhead spending variancef. Variable manufacturing overhead efficiency varianceg. Production-volume variance

Jul 14 2020 Read more Less More

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