ACC 307 – HW #4 – Chapters 7 and 8 The Beal Manufacturing Company’s costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing laborhours (DLH). At the beginning of 2012, Beal adopted the following standards for its manufacturing costs: Direct materials Direct manufacturing labor Manufacturing overhead: Input 3 lb. at $5 per Ib. 5 hrs. at $15 per hr. Cost per Output Unit $ 15.00 75.00 $6 per DLH $8 per DLH Variable 30.00 40.00 Fixed Standard manufacturing cost per output unit $160.00 The denominator level for total manufacturing overhead per month in 2012 is 40,000 direct manufacturing labor-hours. Beal's flexible budget for January 2012 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 25,000 lb. at $5.20 per Ib. 23,100 lb. 40,100 hrs. at $14.60 per hr. $600,000 7,800 output units Instructions 1. Prepare a schedule of total standard manufacturing costs for the 7,800 output units in January 2012. 2. For the month of January 2012, compute the following variances, indicating whether each is favorable (F) or unfavorable (U): a. Direct materials price variance, based on purchases b. Direct materials efficiency variance c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Total manufacturing overhead spending variance f. Variable manufacturing overhead efficiency variance g. Production-volume variance
ACC 307 – HW #4 – Chapters 7 and 8 The Beal Manufacturing Company’s costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing laborhours (DLH). At the beginning of 2012, Beal adopted the following standards for its manufacturing costs: Direct materials Direct manufacturing labor Manufacturing overhead: Input 3 lb. at $5 per Ib. 5 hrs. at $15 per hr. Cost per Output Unit $ 15.00 75.00 $6 per DLH $8 per DLH Variable 30.00 40.00 Fixed Standard manufacturing cost per output unit $160.00 The denominator level for total manufacturing overhead per month in 2012 is 40,000 direct manufacturing labor-hours. Beal's flexible budget for January 2012 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 25,000 lb. at $5.20 per Ib. 23,100 lb. 40,100 hrs. at $14.60 per hr. $600,000 7,800 output units Instructions 1. Prepare a schedule of total standard manufacturing costs for the 7,800 output units in January 2012. 2. For the month of January 2012, compute the following variances, indicating whether each is favorable (F) or unfavorable (U): a. Direct materials price variance, based on purchases b. Direct materials efficiency variance c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Total manufacturing overhead spending variance f. Variable manufacturing overhead efficiency variance g. Production-volume variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:ACC 307 – HW #4 – Chapters 7 and 8
The Beal Manufacturing Company’s costing system has two direct-cost categories: direct
materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is
allocated to products on the basis of standard direct manufacturing laborhours (DLH). At the
beginning of 2012, Beal adopted the following standards for its manufacturing costs:
Direct materials
Direct manufacturing labor
Manufacturing overhead:
Input
3 lb. at $5 per Ib.
5 hrs. at $15 per hr.
Cost per Output Unit
$ 15.00
75.00
$6 per DLH
$8 per DLH
Variable
30.00
40.00
Fixed
Standard manufacturing cost per output unit
$160.00
The denominator level for total manufacturing overhead per month in 2012 is 40,000 direct
manufacturing labor-hours. Beal's flexible budget for January 2012 was based on this
denominator level. The records for January indicated the following:
Direct materials purchased
Direct materials used
Direct manufacturing labor
Total actual manufacturing overhead (variable and fixed)
Actual production
25,000 lb. at $5.20 per Ib.
23,100 lb.
40,100 hrs. at $14.60 per hr.
$600,000
7,800 output units
Instructions
1. Prepare a schedule of total standard manufacturing costs for the 7,800 output units in
January 2012.
2. For the month of January 2012, compute the following variances, indicating whether
each is favorable (F) or unfavorable (U):
a. Direct materials price variance, based on purchases
b. Direct materials efficiency variance
c. Direct manufacturing labor price variance
d. Direct manufacturing labor efficiency variance
e. Total manufacturing overhead spending variance
f. Variable manufacturing overhead efficiency variance
g. Production-volume variance
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