7 part 4 Trini Company set the following standard costs per unit for its single productDirect materials (30 pounds @ $5.50 per pound)Direct labor (7 hours @ $14 per hour)Variable overhead (7 hours @ $6 per hour)Fixed overhead (7 hours @ $12 per hour)Standard cost per unitOverhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% ofthe company's capacity of 62,000 units per quarter. The following additional information is available.Operating LevelsProduction (in units)Standard direct labor hours (7 DLH/unit)Budgeted overhead (flexible budget)Fixed overheadVariable overhead$ 165.0098.0042.0084.00$ 389.0070%43, 400303, 800$ 4, 166, 400$ 1,822, 800Direct materials (1,674, 000 pounds @ $5.50 per pound)Direct labor (390, 600 hours @ $14 per hour)Overhead (390, 600 hours @ $18 per hour)Standard (budgeted) costActual costs incurred during the current quarter follow.Direct materials (1,658,000 pounds @ $7.60 per pound)Direct labor (386, 600 hours @ $12.00 per hour)Fixed overheadVariable overheadActual cost80%49, 600347, 200During the current quarter, the company operated at 90% of capacity and produced 55,800 units; actual direct labortotaled 386,600 hours. Units produced were assigned the following standard costs.$ 4,166, 400$ 4,166,400$ 2,083, 200 $ 2,343, 600$ 9,207,0005,468, 4007,030, 800$ 21, 706, 20090%55,800390, 600$ 12, 600, 8004,639, 2003,321, 4003,109,400$ 23,670, 800Required:1. Compute the direct materials variance, including its price and quantity variances.2. Compute the direct labor variance, including its rate and efficiency variances.3. Compute the overhead controllable and volume variances. Req 1Req 2Req 3ControllableVarianceCompute the overhead volume variances. (Indicate the effect of the variance by selecting favorable, unfavorable, or novariance.)Volume varianceBudgeted total overheadStandard overhead appliedVolume varianceReq 3 VolumeVariance

Name: 7 part 4 Trini Company set the following standard costs per unit for i
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Description: 7 part 4 Trini Company set the following standard costs per unit for its single productDirect materials (30 pounds @ $5.50 per pound)Direct labor (7 hours @ $14 per hour)Variable overhead (7 hours @ $6 per hour)Fixed overhead (7 hours @ $12 per hour)

Fixed Overhead volume variance refers to the concept of determining the gap between the estimated…

Business

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labor (7 hours @ $14 per hour) e overhead (7 hours @ $6 per hour) verhead (7 hours @ $12 per hour) d cost per unit 98.00 42.00 84.00 $ 389.00 is applied using direct labor hours. The standard overhead rate is based o ny's capacity of 62,000 units per quarter. The following additional informa Operating Leve ion (in units) d direct labor hours (7 DLH/unit) overhead (flexible budget) overhead ble overhead 70% 43, 400 303, 800 80% 49,600 347, 200 $ 4,166, 400 $ 4,166,400 $ 1,822,800 $ 2,083, 200 current quarter, the company operated at 90% of capacity and produced

labor (7 hours @ $14 per hour) e overhead (7 hours @ $6 per hour) verhead (7 hours @ $12 per hour) d cost per unit 98.00 42.00 84.00 $ 389.00 is applied using direct labor hours. The standard overhead rate is based o ny's capacity of 62,000 units per quarter. The following additional informa Operating Leve ion (in units) d direct labor hours (7 DLH/unit) overhead (flexible budget) overhead ble overhead 70% 43, 400 303, 800 80% 49,600 347, 200 $ 4,166, 400 $ 4,166,400 $ 1,822,800 $ 2,083, 200 current quarter, the company operated at 90% of capacity and produced

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 33P: Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of...

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Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000. It takes 2 machine hours per unit, direct material cost of $14 per unit, and direct labor of $20 per unit. What is the cost of each unit produced?
Cool Pool has these costs associated with production of 20,000 units of accessory products: direct materials, $70; direct labor, $110; variable manufacturing overhead, $45; total fixed manufacturing overhead, $800,000. What is the cost per unit under both the variable and absorption methods?
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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.
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