Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 60,100 coffee mugs per month: Actual (C More info Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify wh actual quantity; FOH fixed overhead; SC standard cost; SQ = standard quantity) Direct materials cost variance Variance Formula (AC -SC) * AQ (AC -SC) × AQ = $ 800 F = $ 6,030 U a. There were no beginning or ending inventory balances. All expenditures were on account b. Actual production and sales were 62,800 coffee mugs. c. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 201,000 minutes at a total cost of $34,170. e. Actual overhead cost was $9,045 variable and $31,655 fixed. f. Selling and administrative costs were $115,000. Direct labor cost variance Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is fav fixed overhead; SC standard cost; SQ standard quantity.) Direct materials efficiency variance Direct labor efficiency variance = = Data table Formula Direct Materials (0.2 lbs @ $0.25 per lb) Direct Labor (3 minutes @ $0.14 per minute) Manufacturing Overhead: = = $ 0.05 0.42 Variable (3 minutes @ $0.06 per minute) Fixed (3 minutes @ $0.15 per minute) S 0.18 0.45 0.63 $ 1.10 Total Cost per Coffee Mug Variance Requirements Print Done 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs. from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. Rouse intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? Check answer

Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 60,100 coffee mugs per month: Actual (C More info Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify wh actual quantity; FOH fixed overhead; SC standard cost; SQ = standard quantity) Direct materials cost variance Variance Formula (AC -SC) * AQ (AC -SC) × AQ = $ 800 F = $ 6,030 U a. There were no beginning or ending inventory balances. All expenditures were on account b. Actual production and sales were 62,800 coffee mugs. c. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 201,000 minutes at a total cost of $34,170. e. Actual overhead cost was $9,045 variable and $31,655 fixed. f. Selling and administrative costs were $115,000. Direct labor cost variance Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is fav fixed overhead; SC standard cost; SQ standard quantity.) Direct materials efficiency variance Direct labor efficiency variance = = Data table Formula Direct Materials (0.2 lbs @ $0.25 per lb) Direct Labor (3 minutes @ $0.14 per minute) Manufacturing Overhead: = = $ 0.05 0.42 Variable (3 minutes @ $0.06 per minute) Fixed (3 minutes @ $0.15 per minute) S 0.18 0.45 0.63 $ 1.10 Total Cost per Coffee Mug Variance Requirements Print Done 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs. from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. Rouse intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? Check answer

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 7CE: Iliff, Inc., produces and sells two types of countertop ovensthe toaster oven and the convection...

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