Home / Questions / PROBLEM 10A 8 Comprehensive Standard Cost Variances LO1 LO2 LO3 LO4 It certainly is nice t...
PROBLEM 10A–8 Comprehensive Standard Cost Variances [LO1, LO2, LO3, LO4]
“It certainly is nice to see that small variance on the income statement after all the trouble we’ve had lately in controlling manufacturing costs,” said Linda White, vice president of Molina Com- pany. “The $12,250 overall manufacturing variance reported last period is well below the 3% limit we have set for variances. We need to congratulate everybody on a job well done.”
The company produces and sells a single product. The standard cost card for the product follows:
The following additional information is available for the year just completed:
a. The company manufactured 20,000 units of product during the year.
b. A total of 78,000 yards of material was purchased during the year at a cost of $3.75 per yard. All of this material was used to manufacture the 20,000 units. There were no begin- ning or ending inventories for the year.
c. The company worked 32,500 direct labor-hours during the year at a cost of $11.80 per hour.
d. Overhead cost is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow:
|
Denominator activity level (direct labor-hours) . . . . . . . . . . . . . . . . . |
25,000 |
|
Budgeted fixed overhead costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$150,000 |
|
Actual fixed overhead costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$148,000 |
|
Actual variable overhead costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$68,250 |
Required:
1. Compute the direct materials price and quantity variances for the year.
2. Compute the direct labor rate and efficiency variances for the year.
3. For manufacturing overhead, compute the following:
a. The variable overhead rate and efficiency variances for the year.
b. The fixed overhead budget and volume variances for the year.
4. Total the variances you have computed, and compare the net amount with the $12,250 men- tioned by the vice president. Do you agree that everyone should be congratulated for a job well done? Explain.
Jun 28 2020 View more View Less
Describe the three main classifications for cancer.
Nov 28 2019A spider hunting a fly moves between locations 1 and 2 according to a Markov chain with transition matrix starting in location The fly, unaware of the spider, starts in l...
Aug 02 2020fx i If you decide to open up a margin account in order to take a long position in a stock, are you bullish or bearish on that stock? Type your answer in the blue text box below.
Aug 17 2020Do you agree that people should be charged for attending A&E with non-life threatening ailments?
Feb 14 2020A local fast food chain has partnered with its beef supplier. The chain purchases beef in packages of 10 lbs. It does not wish to accept underweight packages of beef. A s...
Dec 02 2019Tater and Pepper Corp. reported free cash flows for 2018 of $39.1 million and investment in operating capital of $22.1 million. Tater and Pepper incurred $13.6 million in...
Mar 29 2020Write a program for the relay ladder diagram shown in Figure 1-16.2. Write a program for the relay ladder diagram shown in Figure 1-17.
Jul 14 2020Mrs. Smith's reading class can read an average of 175 words per minute with a standard deviation of 20 words per minute. The top 3% of the class is to receive a spec...
Apr 11 2020Repeat Exercise R-13.3 for the Knuth-Morris-Pratt algorithm, not counting the comparisons made to compute the failure function.Exercises R-13.3Draw a figure illustrating ...
Jun 11 2020Speech is sometimes idealized as having a Laplacian-amplitude pdf. That is, the amplitude is distributed according toa. Express the variance of X, σ2, in terms of a. Show...
Jul 31 2020