J&W; Corporation manufactures a new electronic game console. The current standar

Question

J&W; Corporation manufactures a new electronic game console. The current standard cost sheet for a game console follows: Direct materials, ? kilograms at $6 per kilogram Direct labor, 0.75 hours at? per hour Overhead,0.75 hours at? per hour S ? per game ? per game per game $ 39 per game Total costs Assume that the following data appeared in J&Ws; records at the end of the past month: Actual production Actual sales Materials (132,000 kilograms) Materials price variance Materials efficiency variance Direct labor price variance Direct labor (41,000 hours) Underapplied overhead (total) 58,000 units 55,000 units $851,000 59,000 U 43,800 U 32,800 U 754,400 20,000 U There are no materials inventories. Required a. Complete the standard cost sheet for a game console given below. Compute the direct labor efficiency variance. (Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Direct materials Direct labor, 0.75 hours at Overhead, 0.75 hours at Total costs kilograms at $6 per kilogram per hour per hour per game per game per game $ 39 per game

Explanation / Answer

Working Note 1)Material efficiency variance =SR[SQ-AQ]     -43800 = $6[SQ-132000] -7300=SQ-132000 SQ=124700 Kg Standard quantity per unit produced = 124700/58000 = 2.15 Kg/ game standard material cost per unit = $6* 2.15 kg=$12.9/game 2)Labor price variance = Actual Hour ( SR-AR)          -32800 = 41000 [SR -($754400/41000)] -0.8=SR-18.40 SR=$17.60 AR=$18.40 standard Labour cost per Unit= $17.60*.75 =$ 13.2 per gmae 3)overhead cost per game =Total cost per game -material cost per game -labor cost per game              = $39-$12.90-$13.20=$12.90 Overhead cost per hour = $12.90/0.75 = $ 17.20 a)Standard Cost Sheet Direct material 2.15 kg at $ 6    $13 Direct labor 0.75 hours at $17.60 $13.20 Overhead 0.75 hours at $ 17.20 12.9 Total cost $39 Labor efficiency variance =SR[SH-AH]                 = $17.60 [(58000*0.75)- 41000] = $44000 F B)Applied overhead =Actual quantity produced *Standard cost per unit =58000 Unit*$12.9= $748200 Actual overhead : Applied overhead +underapplied overhead =748200+20000=768200

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