Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Chapter 11, Problem 11.53AP
1.
To determine
To compute: The direct materials price and quantity variance.
2.
To determine
To compute: The direct labor rate and efficiency variances.
3.
To determine
To compute: The variable
4.
To determine
To compute: The fixed overhead budget and volume variance.
5.
To determine
To indicate: The company’s decision for purchasing superior material wise or not and will it affect the other variances.
6.
To determine
To record: The
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Healthfirst (HF) Ltd has recently started to produce a face shield and product's standard cost data
are as follows:
Cost per unit
Direct materials Perspex (0.5 meters @ $15 per meter)
$ 7.50
Direct materials Hardened Plastic (0.25 meters at $20.00 per meter) 5.00
Direct manufacturing labour (0.5 hr @ $30.00 per hr)
Manufacturing overhead
Total Cost
15.00
Required
Should HF accept the offer. Show all computations.
30.00
$57.50
Additional information
45% of the Manufacturing overhead changes with the number of units produced. Additionally, if
production of face shields is discontinued, 20% of the remaining fixed cost will be avoided. The
budgeted production used to compute overheads is 10,000 units per quarter. HF has been
approached by another company who is willing to supply the face shields at $50. Per unit. The
space used to manufacture face shields can be used to Generate $ 120,000 in contribution margin
per quarter.
Please answer parts 5-8 according to the images attached below.
Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below:
Standard Quantity or Hours
Standard Price or Rate
Standard Cost
Direct materials
?
$ 5.00
per yard
$ ?
Direct labor
?
?
?
Variable manufacturing overhead
?
$ 2
per direct labor-hour
?
Total standard cost per unit
$ ?
Overhead is applied to production on the basis of direct labor-hours. During March, 780 backpacks were manufactured and sold. Selected information relating to the month’s production is given below:
Materials Used
Direct Labor
Variable Manufacturing Overhead
Total standard cost allowed*
$ 15,600
$ 13,104
$ 2,496
Actual costs incurred
$ 13,112
?
$ 5,491
Materials price variance
?
Materials quantity variance
$ 790
U
Labor rate variance
?
Labor efficiency variance
?
Variable…
Michael Roberts is a cost accountant and business analyst for HP Clothing Company (HPCC).
which manufactures expensive T-shirts. HPCC uses two direct cost categories: direct materials
and direct manufacturing labor. It allocates manufacturing overhead to production based upon
labor hours used.
At the beginning of 2020, HPCC adopted the following standards for cach Tshirt:
Input
Direct materials
Standard Quantity Standand Price
Or Hour
3.1 kg
Or Rate
$9 kg
Direct labor
2 hours
S8 hour
Variable overhead
S5 hour
2 hours
Actual results for April 2020 were as follows:
Production
Direct materials purchased
Direct materials used
Direct labor
Variable manufacturing overhead $ 35,600
3,200 T-shirts
12,900 kg at S10 kg
9,000 kg
7,200 hours for $59,000
Required:
a) Compute the standard variable product cost per unit.
b) For the month of April 2020, compute the following variances, indicating whether each is
favorable or unfavorable:
i. Direct materials price variance, based on purchases
ii.…
Chapter 11 Solutions
Managerial Accounting (5th Edition)
Ch. 11 - (Learning Objective 1) Which of the following is...Ch. 11 - (Learning Objective 2) The direct material price...Ch. 11 - Prob. 3QCCh. 11 - Prob. 4QCCh. 11 - Prob. 5QCCh. 11 - (Learning Objective 4) Which of the following is...Ch. 11 - Prob. 7QCCh. 11 - (Learning Objective 6) Which of the following is...Ch. 11 - Prob. 9QCCh. 11 - (Learning Objective 7Appendix) Which of the...
Ch. 11 - Compute the standard cost of direct materials...Ch. 11 - Compute the standard cost of direct labor...Ch. 11 - Explain a direct material variance (Learning...Ch. 11 - Prob. 11.4SECh. 11 - Calculate direct material variances when the...Ch. 11 - Calculate direct labor variances (Learning...Ch. 11 - Prob. 11.7SECh. 11 - Prob. 11.8SECh. 11 - Calculate fixed overhead variances (Learning...Ch. 11 - Calculate and interpret fixed overhead variances...Ch. 11 - Prob. 11.11SECh. 11 - Calculate and interpret overhead variances...Ch. 11 - Record costing transactions (Learning Objective 7)...Ch. 11 - Record standard costing transactions (Learning...Ch. 11 - Identify ethical standards violated (Learning...Ch. 11 - Vocabulary (Learning Objectives 1, 2, 3, 4, 5, 6)...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Calculate and interpret direct material and direct...Ch. 11 - Calculate the material and labor variances...Ch. 11 - Record materials and labor transactions (Learning...Ch. 11 - Calculate the standard cost of a product before...Ch. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Compute and interpret overhead variances (Learning...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Make journal entries in a standard costing system...Ch. 11 - Prepare a standard cost income statement (Learning...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate the standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Prob. 11.38BECh. 11 - Prob. 11.39BECh. 11 - Prob. 11.40BECh. 11 - Prob. 11.41BECh. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Calculate and interpret overhead variances...Ch. 11 - Prob. 11.44BECh. 11 - Prob. 11.45BECh. 11 - Prob. 11.46BECh. 11 - Prob. 11.47BECh. 11 - Prob. 11.48BECh. 11 - Prob. 11.49APCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Prob. 11.52APCh. 11 - Prob. 11.53APCh. 11 - Prob. 11.54BPCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Work backward through labor variances (Learning...Ch. 11 - Determine all variances and make journal entries...Ch. 11 - Calculate labor variances in a hotel (Learning...
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- Highland Company produces a lightweight backpack popular with college students. Standard variable costs relating to a single backpack are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials ?question mark $ 6.00 per yard $ ?question mark Direct labor ?question mark ?question mark ?question mark Variable manufacturing overhead ?question mark $ 2 per direct labor-hour ?question mark Total standard cost per unit $ ?question mark Overhead is applied to production based on direct labor-hours. During March, 800 backpacks were manufactured and sold. Selected information relating to the month’s production is given below: Materials Used Direct Labor Variable Manufacturing Overhead Total standard cost allowed* $ 19,200 $ 9,200 $ 1,600 Actual costs incurred $ 11,100 ?question mark $ 4,740 Materials price variance ?question mark Materials quantity variance $ 3,000 U Labor rate variance ?question mark…arrow_forwardDesigner Furniture Company manufactures designer home furniture. Designer Furniture uses a standard cost system. The direct labor, direct materials, and factory overhead standards for a finished dining room table are as follows: Line Item Description Classification Value Direct labor: standard rate $24.00 per hr. Direct labor: standard time per unit 3.50 hrs. Direct materials (oak): standard price $8.50 per bd. ft. Direct materials (oak): standard quantity 15 bd. ft. Variable factory overhead: standard rate $3.20 per direct labor hr. Fixed factory overhead: standard rate $0.80 per direct labor hr. a. Determine the standard cost per dining room table. Round to two decimal places.fill in the blank 1 of 1$ per tablearrow_forwardCoronado, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Standard Price Standard Quantity Standard Cost Direct materials $3 per yard 2.00 yards $6.00 Direct labor $14 per DLH 0.75 DLH 10.50 Variable overhead $3.20 per DLH 0.75 DLH 2.40 Fixed overhead $3 per DLH 0.75 DLH 2.25 $21.15 Sandy Robison, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November.The company purchased 82,400 yards of fabric and used 94,000 yards of fabric during the month. Fabric purchases during the month were made at $2.80 per yard. The direct labor payroll ran…arrow_forward
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