Crowe Corporation has developed a standard cost system to account for ts manufac

Question

Crowe Corporation has developed a standard cost system to account for ts manufacturing operations. It has determined that for onc of the products that it manufactures the attached standard Crowe estimated at the beginning of the year that they would incur S100,000 of variable manufacturing overhead costs in the Cutting Department while working 40,000 direct labor hours. They also estimated that they would incur S120,000 of variable manufacturing overhead costs in the Assembly Department while working 24,000 direct labor hours and using 20,000 machine hours. Fixed number of direet labor hours worked in the Assembly Department. overhead was budgeted at S120,000 which is to be applied based upon the The actual results for producing 85,000 units during the current year are also attached. REQUIRED: Calculate the following items based upon the attached information. ound all rates to the nearest cent (two decimal places) and all variances to the nearest whole dollar (a) Predetermined Variable Manufacturing Overhead Rate for the Cutting (b) Predetermined Variable Manufacturing Overhead Rate for the Assembly (c) Predetermined Fixed Manufacturing Overhead Rate. (d Direct Materials Price Variance. (e) Direct Materials Quantity Variance. (f Direct Labor Price (Rate)and Quantit (Efficiency) Variance for the Cutting (g) (h) (i) Direct Labor Price (Rate) and Quantity (Efficiency) Variance for the Variable Manufacturing Overhead Price (Spending) and Quantity(Efficiency) Variance for the Cutting Department. Variable Manufacturing?verhead Price (SpendingandQuantity(Efficiency) ) Fixed Manufacturing Overhead Price (Spending) Variance. (k) Fixed Manufacturing Overhead Volume (Quantity) Variance.

Explanation / Answer

Direct material Qty Variance Standard price(Standard Quantity -Actual quantity) .60(255000-260000) 3000 A Direct Labour Price Variance (Cutting) (Standard rate-Actual rate)* Actual Hours (8-8.15)*42000 6300 A Actual rate 342300/42000 8.15 Direct Labour Quantity Variance (Cutting) Standard Rate (Standard Hours-Actual Hours) 8 (42500-42000) 4000 F Standard Hours 85000*.5 42500 Direct Labour Price Variance (Assembly) (Standard rate-Actual rate)* Actual Hours (10-10.2)*26000 5200 A Actual rate 265200/26000 10.2 Direct Labour Quantity Variance (Assembly) Standard Rate (Standard Hours-Actual Hours) 10(25500-26000) 5000 A Standard Hours 85000*.3 25500 variable manufacturing overhead price variance (Cutting) Standard Overheadd rate (Actual Hours-Standard Hours) 2.5 (42500-42000) 1250 F Standard overhead rate 100000/40000 2.5 variable manufacturing overhead quantity variance (Cutting) Actual hours worked (Actual Overhead rate-standard overhead rate) 42500 (2.38-2.5) -5100 Actual overhead rate 2.38 variable manufacturing overhead price variance (Assembly) Standard Overheadd rate (Actual Hours-Standard Hours) 6 (20500-21250) 4500 A Standard overhead rate 120000/20000 6 Standard Hours .25*85000 21250 variable manufacturing overhead quantity variance (Assembly) Actual hours worked (Actual Overhead rate-standard overhead rate) 20500(5.95-6) 1025 F Actual overhead rate 122000/20500 5.95

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