Home / Questions / PROBLEM 10A 12 Comprehensive Standard Cost Variances LO1 LO2 LO3 LO4 Dresser Company uses...
PROBLEM 10A–12 Comprehensive Standard Cost Variances [LO1, LO2, LO3, LO4]
Dresser Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company’s budget for the current year:
|
Denominator activity (direct labor-hours) . . . . . . . . . . . . . . . . . . . . . . . . . |
9,000 |
|
Variable manufacturing overhead cost at 9,000 direct labor-hours . . . . . . |
$34,200 |
|
Fixed manufacturing overhead cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$63,000 |
The standard cost card for the company’s only product is given below:
|
Direct materials, 4 pounds at $2.60 per pound . . . . . . . . . . . . . . . . . . |
$10.40 |
|
Direct labor, 2 direct labor-hours at $9.00 per hour . . . . . . . . . . . . . . |
18.00 |
|
Overhead, 2 direct labor-hours at $10.80 per hour . . . . . . . . . . . . . . . |
21.60 |
|
Standard cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$50.00 |
During the year, the company produced 4,800 units of product and incurred the following costs:
|
Materials purchased, 30,000 pounds at $2.50 per pound . . . . . . |
$75,000 |
|
Materials used in production (in pounds) . . . . . . . . . . . . . . . . . . . |
20,000 |
|
Direct labor cost incurred, 10,000 direct labor-hours at |
|
|
$8.60 per direct labor-hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$86,000 |
|
Variable manufacturing overhead cost incurred . . . . . . . . . . . . . . |
$35,900 |
|
Fixed manufacturing overhead cost incurred . . . . . . . . . . . . . . . . |
$64,800 |
Required:
1. Redo the standard cost card in a clearer, more usable format by detailing the variable and fixed overhead cost elements.
2. Prepare an analysis of the variances for materials and labor for the year.
3. Prepare an analysis of the variances for variable and fixed overhead for the year.
4. What effect, if any, does the choice of a denominator activity level have on standard unit costs? Is the volume variance a controllable variance from a spending point of view? Explain.
Jun 28 2020 View more View Less
A job shop makes four types of products. Each product type includes several different stock-keeping items. Each item is produced a number of times each year. After comple...
Apr 08 2021Theoretically, how would an individual working at minimum wage react to an increase in the minimum wage, ceteris paribus? The individual would increase working hours . Th...
Jun 01 2020[Q10] Suppose relation R(A,B,C) has the following tuples: А В С 1 2 4 4 6 1 2 6 and relation S(A, B,C) has the following tuples: А В с 2 5 3 2 5 4 4 6 1 2 3 Compute (R - ...
Apr 02 2020Oasis Water Company transports gallons of water from three Factories to four Warehouses. The supplies, demands, and the unit transportation costs on different routes are ...
Aug 21 2020Color transformations matrix. r= amount of input red light g= amount of input green light b= amount of input blue light Now Q1) Goggles switch red light with green light....
Aug 02 2020The figure above shows how the relationship between the number of hours per week a high school student spends on the web and the student's SAT score. Is the relation...
Dec 08 2019Which work-related value dimension is best identified by the extent to which the primary focus is on assertive acquisition of money and power versus the quality of life a...
Mar 27 2018Fundamental Problem 7.17 1 of 13 Review Draw the shear and moment diagrams for the beam (Figure 1) Part A Figure 1 of 1 > Draw the shear diagram for the beam Click on "ad...
Aug 20 2020What are the challenges that affect the quality and outcome of training? How will you improve the effectiveness of training programmes? >
May 12 2020In a survey of men in the United States (ages 20 to 29), the mean height was 69.9 inches with a standard deviation of 3.0 inches. Assume the height data is normally distr...
Apr 25 2020