The flowin aad ots were developed for a product 556.00 80.00 64.00 96.00 $296.00
ID: 2400205 • Letter: T
Question
The flowin aad ots were developed for a product 556.00 80.00 64.00 96.00 $296.00 Standard Cost Card Per Unit Materials feer S14 per foot Diect Labor 8 hours 510 per heo Fixed overhead 8 hours $12 per hour Total standard cost per unit or the The following information is available regarding the company's operations f perod 11,000 52.000 feet @ $13.70 per foot 40,000 feet Materials used Direct Labor 84,000 hours costing $840,000 Manufacturing overhead incurred: Variable Fixed $756,000 S1,000,000 Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate us based on expected capacity of 80,000 direct labor hours. Required a. Calculate the materials price variance. b. Calculate the materialswageBawe EFFi ci EN cy VAR? ANCe. c. Calculate the direct labora PRice UARIAw ce d. Calculate the direct labor efficiency variance e. Calculate the variable manufacturing overhead f Calculate the variable manufacturing overhead efficiency variance Calculate the fixed manufacturing overhead wiwemmes h. Calculate the fixed manufacturing overhead volume variance. i. Record all the following entries: pe i c e u AR? AM e a. Purchase of materials b. Usage of materials c. Direct labor used in production d. Closing of material and direct labor variances to cost of goods sold. e. Assign overhead to production. f Recognize the incurrence of actual overhead. g. Recognize the overhead variances. h. Close out the overhead variances to cost of good sold.Explanation / Answer
1. calculate direct materials price variance
Direct Material variance=(Standard Price- Actaul Price)*Actaul Material Used
=(14-13.70)*40000
=12000 is the Direct material price variance
2. Material efficency Variance is calculated as followed
Material Price efficency Variance=(Actual Quantity-Standard quantity)*Standard price
=(40000-44000)*14
=-56000
3. Direct Labour Price Variance is calculated as follows
Direct Labour Price Variance=(Standard rate- Actual rate)*Actual Hours worked
=(10-10)*84000
=0 is the direct labour price variance
4. Direct Labour efficency Variance is calculated as followed
Direct Labour Efficency Variance= (Actual Hours-standard hours)*Standard rate
=(84000-88000)*10
=-40000
5. Variable manufacturin overhead price variance
=(Actual variable overhead rate-standar variable overhead rate)*Actual hours
=(9-8)*84000
=84000
6. variable overhead efficency variance
=(Standard direct labours allowed-actaul labour hours)*standard variable overhead rate
=(88000-84000)*8
=4000*8
=32000
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