Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 30,400 barrels of oil for purchase in June for $66 per barrel. Direct labor budgeted in the chemical process was $ 220,700 for June. Factory overhead was budgeted $361,200 during June. The inventories on June 1 were estimated to be: \table[[Oil, $15,400 Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 30, 400 barrels of oil for purchase in June for $66 per barrel. Direct labor budgeted in the chemical process was $220, 700 for June. Factory overhead was budgeted $361,200 during June. The inventories on June 1 were estimated to be: \table[[Oil, $15,400

Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 30,400 barrels of oil for purchase in June for $66 per barrel. Direct labor budgeted in the chemical process was $ 220,700 for June. Factory overhead was budgeted $361,200 during June. The inventories on June 1 were estimated to be: \table[[Oil, $15,400 Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 30, 400 barrels of oil for purchase in June for $66 per barrel. Direct labor budgeted in the chemical process was $220, 700 for June. Factory overhead was budgeted $361,200 during June. The inventories on June 1 were estimated to be: \table[[Oil, $15,400

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...

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Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at 0.38 per pound. Actual direct labor used was 91,000 hours at 12.10 per hour. Required: 1. Calculate the direct materials price and usage variances. 2. Calculate the direct labor rate and efficiency variances. 3. Prepare the journal entries for the direct materials and direct labor variances. 4. Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.
Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.
Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 28,400 barrels of oil for purchase in June for $68 per barrel. Direct labor budgeted in the chemical process was $231,700 for June. Factory overhead was budgeted at $347,600 during June. The inventories on June 1 were estimated to be: $16,200 10,900 9,300 Work in process 13,400 The desired inventories on June 30 were: Oil P1 P2 Oil P1 P2 Work in process $17,800 10,000 8,800 13,900 Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Delaware Chemical Company Cost of Goods Sold Budget For the Month Ending June 30 Direct materials: $
Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 14,000 barrels of oil for purchase in June for $63 per barrel. Direct labor budgeted in the chemical process was $97,000 for June. Factory overhead was budgeted at $158,800 during June. The inventories on June 1 were estimated to be: Oil $6,800 P1 4,600 P2 3,900 Work in process 5,600 The desired inventories on June 30 were: $7,500 4,200 3,700 5,800 Oil P1 P2 Work in process Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Delaware Chemical Company Cost of Goods Sold Budget For the Month Ending June 30 Line Item Description Amount Amount Amount Direct materials: 0000000 10000
Wilmington Chemical Company uses oil to produce two types of plastic products, P1 and P2. Wilmington budgeted 50,000 barrels of oil for purchase in June for $50 per barrel. Direct labor budgeted in the chemical process was $300,000 for June. Factory overhead was budgeted $500,000 during June. The inventories on June 1 were estimated to be: Oil $15,500 P1 25,400 P2 22,900 Work in process 3,400 The desired inventories on June 30 were: Oil $16,100 P1 28,500 P2 25,000 Work in process 4,000 Use the preceding information to prepare a cost of goods sold budget for June. Wilmington Chemical CompanyCost of Goods Sold BudgetFor the Month Ending June 30 $- Select - $- Select - Direct materials: $- Select - - Select - $- Select - - Select - $- Select - - Select - - Select - - Select - $- Select - - Select - - Select - $-…
Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 24,400 barrels of oil for purchase in June for $71 per barrel. Direct labor budgeted in the chemical process was $225,200 for June. Factory overhead was budgeted at $311,800 during June. The inventories on June 1 were estimated to be: Oil P1 $15,800 10,600 P2 9,000 Work in process 13,100 The desired inventories on June 30 were: Oil P1 P2 Work in process Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign. $17,300 9,700 8,600 13,500 ✓ Line Item Description Finished goods inventory, June 1 Work in process inventory, June 1 Direct materials: Direct materials inventory, June 1 Direct materials purchases ✓ Cost of direct materials available for use Direct materials inventory, June 30 Cost of direct materials placed in production Direct labor ✓ Factory overhead Total…
Roget Factory has budgeted factory overhead for the year at $4,392,000. It plans to produce 2,000,000 units of product. Budgeted direct labor hours are 360,000, and budgeted machine hours are 750,000. Using a single plantwide factory overhead rate based on direct labor hours, the factory overhead rate for the year is a.$12.20 b.$15.86 c.$6.10
The total factory overhead for Landen Company is budgeted for the year at $675,000. Landen manufactures two drapery products: sheer curtains and insulated curtains. These products each require 6 direct labor hours (dlh) to manufacture. Each product is budgeted for 7,500 units of production for the year. What would the factory overhead allocated per unit for insulated curtains using the single plantwide factory overhead rate be? a.$15.00 b.$270.00 c.$45.00 d.$90.00
Sica Company manufactures a single product that has a standard materials cost of P20 (4 units of materials at P5 per unit), standard direct labor cost of P9 (1 hour per unit), and standard variable overhead cost of P4 (based on direct labor hours). Fixed overhead is budgeted at P17,000 per month. The following data pertain to operations for the month of May: Materials purchased: 8,000 units costing P39,400Materials used in production of 1,500 units of finished product: 6,200 units of materialsDirect labor used: 1,500 hours costing P15,000Variable overhead costs incurred: P5,960 Fixed overhead costs incurred: P17,500 Required: I. Prepare a performance report for Sica for May using the following headings: 1. Actual…
Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: Standard Cost Cost Category per 100 Two-Liter Bottles Direct labor $1.20 Direct materials 6.50 Factory overhead 1.80 Total $9.50 At the beginning of March, Salisbury's management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: Actual Cost for the Cost Category Month Ended March 31 Direct labor $6,550 Direct materials 33,800 Factory overhead 9,100 Total $49,450 a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. Salisbury Bottle Company Manufacturing Cost Budget For the Month Ended March 31 Standard Cost at Planned Volume (500,000 Bottles) Check My Work Multiply the standard cost per unit times the units planned…
Roget Factory has budgeted factory overhead for the year at $15,500,000. It plans to produce 2,000,000 units of product. Budgeted direct labor hours are 1,050,000, and budgeted machine hours are 750,000. Using a single plantwide factory overhead rate based on direct labor hours, the factory overhead rate for the year is a. $20.67 b. $77.50 c. $7.75 Od. $14.76
Denton Company manufactures three products (A, B, and C) from three raw materials (X, Y, and Z). The following table indicates the number of pounds of each material that is required to manufacture each type of product: Product Material X Material Y Material Z А 2 2 1 2 C 3 2 The company has a policy of maintaining an inventory of finished goods on all three products equal to 25% of the next month's budgeted sales. Unit costs of materials X, Y, and Z are respectively $4, $3, and $5. Denton Company has a policy of maintaining its raw material inventories at 50% of the next month's production needs. Listed below is the sales budget for the first quarter of the current year: Month Product C 12,000 8,000 10,000 Product A Product B Jan. 10,000 11,000 12,000 10,000 Feb. 9,000 Mar. 11,000 Selling prices for products A, B, and C are $120, $140, and $150. Monthly sales for Denton are 25% on cash and the rest on account. Of those sold on account, Denton gives a 5% discount if the account is…