Nevada Corporation makes a product with the following standard costs: Standard Quantity Standard Price or Rate $ 3.00 per ounce or Hours 6.4 ounces 0.4 hours 0.4 hours S 13.00 per hour $ 5.00 per hour The company reported the following results concerning this product in March. 4,800 units Originally budgeted output Actual output Raw materials used in production Actual direct labor-hours 4,900 units 30,230 ounces 1,910 hours. 32,600 ounces Direct materials Direct labor Variable overhead Purchases of raw materials Actual price of raw materials Actual direct labor rate Actual variable overhead rate O $3,277 F O $3,390 U S S S O $3,390 F O $3,277 U Standard Cost Per Unit S S S 2.90 per ounce 12.40 per hour 4.90 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is: 19.20 5.20 2.00
Nevada Corporation makes a product with the following standard costs: Standard Quantity Standard Price or Rate $ 3.00 per ounce or Hours 6.4 ounces 0.4 hours 0.4 hours S 13.00 per hour $ 5.00 per hour The company reported the following results concerning this product in March. 4,800 units Originally budgeted output Actual output Raw materials used in production Actual direct labor-hours 4,900 units 30,230 ounces 1,910 hours. 32,600 ounces Direct materials Direct labor Variable overhead Purchases of raw materials Actual price of raw materials Actual direct labor rate Actual variable overhead rate O $3,277 F O $3,390 U S S S O $3,390 F O $3,277 U Standard Cost Per Unit S S S 2.90 per ounce 12.40 per hour 4.90 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is: 19.20 5.20 2.00
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 12P: Overhead application rate Roll Tide Manufacturing Inc. uses a job order cost system and standard...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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