Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours worked during August were 3,500, and the total direct labor budget variance was $1,820 unfavorable. The standard labor rate was $22.40 per hour, but recent resignations allowed the firm to hire lower-paid replacement workers for some jobs, and this produced a favorable rate variance of $4,900 for August. Required: a. Calculate the actual direct labor rate paid per hour during August. Note: Do not round intermediate calculations. Round your answer to 1 decimal place. b. Calculate the dollar amount of the direct labor efficiency variance for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). c. Calculate the standard direct labor hours allowed for the actual level of activity during August. (Hint: Use the formula for

Four Seasons Industries has established direct labor performance standards for its maintenance and repair shop. However, some of the labor records were destroyed during a recent fire. The actual hours worked during August were 3,500, and the total direct labor budget variance was $1,820 unfavorable. The standard labor rate was $22.40 per hour, but recent resignations allowed the firm to hire lower-paid replacement workers for some jobs, and this produced a favorable rate variance of $4,900 for August. Required: a. Calculate the actual direct labor rate paid per hour during August. Note: Do not round intermediate calculations. Round your answer to 1 decimal place. b. Calculate the dollar amount of the direct labor efficiency variance for August. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). c. Calculate the standard direct labor hours allowed for the actual level of activity during August. (Hint: Use the formula for

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 15E: Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing...

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Nodalos Company has a maintenance shop where all kinds of trucks repairs are performed. Through the years, various labor standards have been developed to judge performance. However, during a March strike, some labor records vanished. The actual hours of input were 1,000. The direct labor variance was P 1,700, favorable. The standard labor rate was P14 per hour; however, a recent labor shortage had necessitated using higher paid labor workers for some jobs and had produced a labor rate variance for March of P400, unfavorable. 1. What are the standard hours allowed for output achieved? 2. What is the actual labor rate?
Cow, Inc. has a maintenance shop where repairs to its motor vehicles are done. During last month's labor strike, certain records were lost. The actual input of direct labor hours was 1,000 and the resulting direct labor budget variance was a favorable of Ph 3,400. The standard direct labor rate was Ph28.00 per hour, but an unexpected labor shortage necessitated the hiring of higher-paid workers for some jobs and resulted in a rate variance of Ph 800. The actual direct labor rate was? Ph 27.20 per hour Ph 28.80 per hour Ph 30.25 per hour Ph 31.40 per hour
The manager at Screaming Trees has been trying to calculate the portion of the company's overhead expenses that is fixed and the portion that is variable. Over the past twelve months, the number of yards of mulch processed was highest in July, when the total monthly overhead costs totaled $32,000 for 37,000 yards of mulch processed. The lowest number of yards of mulch processed in the last twelve months occurred in October, when total overhead costs were $26,000 for 26,000 yards of mulch processed. What was the variable cost per yard? OA. $1.00 O B. $1.83 O C. $0.55 O D. $0.86
Anders Painting Service specializes in painting tall office buildings. During a recent month, the company worked on three painting projects (the Arrow Building, the Besler Building and the Cartrwright Building). The company is interested in controlling the materials costs, namely the paint, used for these painting contracts. In order to provide management with useful cost control information, the company uses standard costs and prepares monthly variance reports. Analysis reveals that the purchasing agent mistakenly purchased poor-quality paint for the Arrow Building project. The Besler Building project, however, received higher-than-standard-quality paint that was on sale. The Cartwright Building project received standard-quality paint. However, the price had increased and a new employee was used to paint the building. Shown below are quantity and cost data for each project. Actual Project Arrow Building Besler Building Cartwright Building 4,500 Total variance Quantity 3,750 gallons…
Lily Painting Service specializes in painting tall office buildings. During a recent month, the company worked on three painting projects (the Arrow Building, the Besler Building and the Cartrwright Building). The company is interested in controlling the materials costs, namely the paint, used for these painting contracts. In order to provide management with useful cost control information, the company uses standard costs and prepares monthly variance reports. Analysis reveals that the purchasing agent mistakenly purchased poor-quality paint for the Arrow Building project. The Besler Building project, however, received higher-than-standard-quality paint that was on sale. The Cartwright Building project received standard-quality paint. However, the price had increased and a new employee was used to paint the building. Shown below are quantity and cost data for each project. Project Arrow Building Besler Building Total variance (a) Cartwright Building 4,540 Project Arrow Building Besler…
The auto repair shop of Empire Motor Sales uses standards to control labor time and labor cost in the shop. The standard time for a motor tune-up is 2.5 hours. The record showing time spent in the shop last week on tune-ups has been misplaced; however, the shop supervisor recalls that 50 tune-ups were completed during the week and the controller recalls that the labor rate variance on tune-ups was $87, favorable. The shop has a set standard labor rate of $9 per hour for tune-up work. The total labor variance for the week on tune-up work was $93, unfavorable. The number of actual hours spent on tune-up work last week was: Group of answer choices 145 hours 140 hours 125 hours 105 hours
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Claudia King, the manager of the city of Elko road maintenance shop uses standards to judge performance. Because a clerk mistakenly discarded some labor records, however, Claud has only partial data for April. She knows that the total direct-labor flexible- budget variance was $3,368 favorable. Moreover, a recent pay raise produced an unfavorable labor price variance for April of $1,232. The actual hours of input were 1,760 and the standard labor price was $20 per hour. Requirements 1. Find the actual labor rate per hour. 2. Determine the standard hours allowed for the output achieved. Requirement 1. Find the actual labor rate per hour. First enter the formula, then compute the actual labor rate per hour. (Round your answer to two decimal places. Abbreviations used: Act. - Actual; F = Favorable; Qty. = Quantity; Prod. = Production; Std. = Standard; U = Unfavorable.) Std. labor price Labor price variance [U] / Actual hours used 1,760 20.00 1,232 1 X +($ Requirement 2. Determine the…
Ackerman’s Garage uses standards to plan and control labor time and expense. The standard time for an engine tune-up is 3.5 hours, and the standard labor rate is $15 per hour. Last week, 24 tune-ups were completed. The labor efficiency variance was 6 hours unfavorable, and the labor rate variance totaled $81 favorable. Required: Calculate the actual direct labor hourly rate paid for tune-up work last week. (Round your answer to 1 decimal place.) Calculate the dollar amount of the labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Less skilled, lower paid workers took longer than standard to get the work done is the most likely explanation for these two variances a. actual direct labor rate per hour b. direct labor efficiency c. less skilled workers took longer than standard time? True or False
An accountant has been monitoring the overall indirect service costs incurred at their company based on the number of labour hours worked. They accept that the costs follow a uniform, regular pattern so decide to use the High-Low method to calculate the Variable Costs and then the fixed costs. The have found the during the month when the lowest hours were worked ( 2083 hours) that the service costs in that low activity month was $14705. In the month when the highest hours were worked ( 4803 hours) the service costs were $18998. Calculate the Variable Cost using the high-low method. Note: Do not input the $ sign, just the decimal number to two decimal places
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As an assistant cost accountant for Mississippi Industries, you have been assigned to review the activity base for the predetermined factory overhead rate. The president, Tony Favre, has expressed concern that the over- or underapplied overhead has fluctuated excessively over the years.An analysis of the company’s operations and use of the current overhead rate (direct labor cost) has narrowed the possible alternative overhead bases to direct labor cost and machine hours. For the past five years, the following data have been gathered: Attachment In teams:1. Calculate a predetermined factory overhead rate for each alternative base, assuming that rates would have been determined by relating the total amount of factory overhead for the past five years to the base.2. For each of the past five years, determine the over- or underapplied overhead based on the two predetermined overhead rates developed in part (1).3. Which predetermined overhead rate would you recommend? Discuss the basis for…