Flandro Company uses a standard cost system and sets predetermined overhead rate

Question

Flandro 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:

Fixed manufacturing overhead cost$150,000

$56.20

Fixed manufacturing overhead cost incurred

Redo the standard cost card in a clearer, more usable format by detailing the variable and fixed overhead cost elements. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Prepare an analysis of the variances for direct materials and direct labor for the year. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.) Omit the "$" sign in your response.)

Prepare an analysis of the variances for variable and fixed overhead for the year. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.) Omit the "$" sign in your response.)

$34,500

Denominator activity (direct labor-hours) 12,500 Variable manufacturing overhead cost $ 51,250

Fixed manufacturing overhead cost$150,000

The standard cost card for the company's only product is given below:

Direct materials, 2 yards at $3.00 per yard $6.00 Direct labor, 2 hour at $9 per hour 18.00 Manufacturing overhead, 179% of direct labor cost 32.20 Standard cost per unit

$56.20

During the year, the company produced 5,100 units of product and incurred the following costs:

Materials purchased, 30,000 yards at $2.90 per yard $87,000 Materials used in production (in yards) 24,000 Direct labor cost incurred, 13,000 hours at $8.4 per hour $109,200 Variable manufacturing overhead cost incurred $33,300

Fixed manufacturing overhead cost incurred

Requirement 1:

Redo the standard cost card in a clearer, more usable format by detailing the variable and fixed overhead cost elements. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Direct materials $ 6.00 Direct labor 18.00 Variable manufacturing overhead 8.20 Fixed manufacturing overhead cost 24.00 Standard cost per unit

$ 56.20

Requirement 2:

Prepare an analysis of the variances for direct materials and direct labor for the year. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.) Omit the "$" sign in your response.)

Materials variances: Price Variance $ 3,000 F Quantity Variance $ 41,400 U Labor variances: Rate Variance $ 7,800 F Efficiency Variance $ 27,000 U

Requirement 3:

Prepare an analysis of the variances for variable and fixed overhead for the year. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.) Omit the "$" sign in your response.)

Variable overhead variances: Rate Variance $ 20,000 F Efficiency Variance $ 4,500 U Fixed manufacturing overhead variances: Budget variance $ 115,500 F Volume Variance $ 12,000 U

$34,500

Explanation / Answer

CHECK FIGURE

(1a) Materials price variance: $15,625 F

(2a) Labor efficiency variance: $13,260 U

Burton Labs, Inc. produces various chemical compounds for industrial use. One compound, called Soft Iron, is

prepared by means of an elaborate distilling process. The company has developed standard costs for one unit of Soft

Iron as follows:

Direct materials

Direct labor

Variable manufacturing overhead

During November, the following activity was recorded by the company relative to production of Soft Iron:

a. Materials purchased, 12,500 ounces at a cost of $240,625.

b. There was no beginning inventory of materials; however, at the end of the month, 3,300 ounces of material

remained in ending inventory.

c. The company employs 38 lab technicians to work on the production of Soft Iron. During November, each

worked an average of 165 hours each at an average rate of $11.50 per hour.

d. Variable manufacturing overhead is assigned to Soft Iron on the basis of direct labor-hours. Variable

manufacturing overhead costs during November totaled $20,378.

e. During November, 3,500 good units of Soft Iron were produced.

The company

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.