Direct materialsDirect laborVariable manufacturing overhead (basedon direct labor-hours)Direct materials (8,100 yards)Direct laborVariable manufacturing overheadTotal$36,360$ 7,070$ 3,030During August, the factory worked only 1,080 direct labor-hours and produced 2,700 sets of covers. The following actual costs wererecorded during the month:Per Set ofCovers$18.003.50Total$ 46,980$ 9,990$ 4,5901. Materials price variance1. Materials quantity variance2. Labor rate variance1.50$23.002. Labor efficiency variance3. Variable overhead rate variance3. Variable overhead efficiency varianceAt standard, each set of covers should require 2.0 yards of material. All of the materials purchased during the month were used inproduction.Per Set ofCovers$ 17.403.701.70$22.80Required:1. Compute the materials price and quantity variances for August.2. Compute the labor rate and efficiency variances for August.3. Compute the variable overhead rate and efficiency variances for August.(Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)FFF

Name: Direct materialsDirect laborVariable manufacturing overhead (basedon
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Description: Direct materialsDirect laborVariable manufacturing overhead (basedon direct labor-hours)Direct materials (8,100 yards)Direct laborVariable manufacturing overheadTotal$36,360$ 7,070$ 3,030During August, the factory worked only 1,080 direct labor-hour

The materials variances compare the actual and standard cost of materials. The labor variances…

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Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (8,100 yards) Direct labor Variable manufacturing overhead Total $36,360 $ 7,070 $ 3,030 Total $ 46,980 $ 9,990 $4,590 Set of Covers During August, the factory worked only 1,080 direct labor-hours and produced 2,700 sets of covers. The following actual costs were recorded during the month: 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance $ 18.00 3.50 1.50 $23.00 Per Set of Covers $17.40 3.70 1.70 $22.80 At standard, each set of covers should require 2.0 yards of material. All of the materials purchased during the month were used in production. Required: 1. Compute the materials price and quantity variances for August. 2. Compute the labor rate and efficiency variances for August. 3. Compute the variable overhead rate and efficiency variances for August. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) F U U F U

Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (8,100 yards) Direct labor Variable manufacturing overhead Total $36,360 $ 7,070 $ 3,030 Total $ 46,980 $ 9,990 $4,590 Set of Covers During August, the factory worked only 1,080 direct labor-hours and produced 2,700 sets of covers. The following actual costs were recorded during the month: 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance 3. Variable overhead rate variance 3. Variable overhead efficiency variance $ 18.00 3.50 1.50 $23.00 Per Set of Covers $17.40 3.70 1.70 $22.80 At standard, each set of covers should require 2.0 yards of material. All of the materials purchased during the month were used in production. Required: 1. Compute the materials price and quantity variances for August. 2. Compute the labor rate and efficiency variances for August. 3. Compute the variable overhead rate and efficiency variances for August. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) F U U F U

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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Comacho Chemical Co. recorded costs for the month of 18,900 for materials, 44,100 for labor, and 26,250 for factory overhead. There was no beginning work in process, 8,000 units were finished, and 3,000 units were in process at the end of the period, two-thirds completed. Compute the months unit cost for each element of manufacturing cost and the total per unit cost. (Round unit costs to three decimal places.)
Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
Abbey Products Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, 60,000; estimated materials costs, 50,000; estimated direct labor costs, 60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none. The actual factory overhead incurred for November was 80,000, and the production statistics on November 30 are as follows: Required: 1. Compute the predetermined rate, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month. 3. Determine the under-or overapplied factory overhead, in total, at the end of the month under each of the methods. 4. Which method would you recommend? Why?
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
Kennedy Appliance Inc.s Machining Department incurred 450,000 of factory overhead cost in producing hoses and valves. The two products consumed a total of 9,000 direct machine hours. Of that amount, hoses consumed 4,250 direct machine hours. Determine the total amount of factory overhead that should be allocated to hoses using machine hours as the allocation base.
Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
Clearwater Candy Co. had a cost per equivalent pound for the month of 4.56 for materials, 1.75 for labor, and 1.00 for overhead. During the month, 10,250 lb were completed and transferred to finished goods. The 3,200 lb in ending work in process were 100% complete as to materials and 60% complete as to labor and overhead. At the beginning of the month, 1,500 lb were in process, 100% complete as to materials and 50% complete as to labor and overhead. The beginning inventory had a cost of 8,775. Clearwater uses FIFO costing. Required: 1. Calculate the cost of the pounds completed and transferred to finished goods. 2. Calculate the cost of the ending work in process.
A company estimated 100,000 direct labor hours and $800,000 in overhead. The actual overhead was $805,100, and there were 99,900 direct labor hours. What is the predetermined overhead rate, and how much was applied during the year?
York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?
Direct labor costs During May, Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305. The total direct labor was incurred at a rate of 28 per direct labor hour for Job 200 and 24 per direct labor hour for Job 305. Journalize the entry to record the flow of labor costs into production during May.