Chapter 21 Help Save & E Che Antuan Company set the following standard costs for
ID: 2552128 • Letter: C
Question
Chapter 21 Help Save & E Che Antuan Company set the following standard costs for one unit of its product Direct materials (4.0 Ibs. $6.00 per Ib.)$24 00 Direct labor (1.8 hrs. 11.00 per hr. Overhead (1.8 hrs. $18.50 per hr.) Total standard cost Part 2 of 4 19.80 33.30 $77.10 oints The predetermined overhead rate $18.50 perd rectlabor hour is based on an expected volume of 75% of the factor's capacity of 20,000 units per month. Following are the company's budgeted overhead costs per month at the eBook 75% capacity level. Print Overhead Budget (758 Capacity Variable overhead costs 30,000 75,000 30,000 30,000 Indirect materials Indirect labor Power Repairs and maintenance Total variable overhead costs $165,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total fixed overhead costs 23,000 71,000 17,000 334 500 $499,500 Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. KPrex11 12 13 of 13Next>Explanation / Answer
Actual Cost
AQ
x
AP
61,000
x
$ 6.10
$ 372,100
AQ
x
SP
61,000
x
$ 6.00
$ 366,000
Standard Cost
SQ
x
SP
60000
x
$ 6.00
$ 360,000
=4*(20000*75%)
Direct Material Cost Variance
= Actual Cost - Standard cost
=372100 - 360000
$ 12,100
Unfavourable
Direct Material Price Variance
=Actual Quantity (Actual Price - Standard Price)
=61000*(6.1 - 6)
$ 6,100
Unfavourable
Direct Material Quantity Variance
=Standard Price(actual quantity - Standard Quantity)
=6*(61000 - 60000)
$ 6,000
Unfavourable
Actual Cost
AQ
x
AP
61,000
x
$ 6.10
$ 372,100
AQ
x
SP
61,000
x
$ 6.00
$ 366,000
Standard Cost
SQ
x
SP
60000
x
$ 6.00
$ 360,000
=4*(20000*75%)
Direct Material Cost Variance
= Actual Cost - Standard cost
=372100 - 360000
$ 12,100
Unfavourable
Direct Material Price Variance
=Actual Quantity (Actual Price - Standard Price)
=61000*(6.1 - 6)
$ 6,100
Unfavourable
Direct Material Quantity Variance
=Standard Price(actual quantity - Standard Quantity)
=6*(61000 - 60000)
$ 6,000
Unfavourable
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