Maple Leaf Production manufactures truck tires. The following information is available for the last operating period. • Maple Leaf produced and sold 93,000 tires for $36 each. Budgeted production was 97,000 tires. • Standard variable costs per tire follow. Direct materials: 4 pounds at $2.00 Direct labor: 0.35 hours at $15.00 Variable production overhead: 0.10 machine-hours at $15 per hour Total variable costs $ 8.00 5.25 1.50 $14.75

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

please need correct and complete answer for all with all working 

 

Maple Leaf Production manufactures truck tires. The following information is available for the last operating period.
• Maple Leaf produced and sold 93,000 tires for $36 each. Budgeted production was 97,000 tires.
• Standard variable costs per tire follow.
Direct materials: 4 pounds at $2.00
Direct labor: 0.35 hours at $15.00
Variable production overhead: 0.10 machine-hours at $15 per hour
Total variable costs
Fixed production overhead costs:
Monthly budget $1,458,000
• Fixed overhead is applied at the rate of $16.00 per tire.
• Actual production costs:
Direct materials purchased and used: 397,000 pounds at $1.70
Direct labor: 28,500 hours at $15.30
Variable overhead: 11,000 machine-hours at $15.70 per hour
Fixed overhead
$ 8.00
5.25
1.50
$14.75
674,900
436,050
172,700
1,459,000
Required:
a. Prepare a cost variance analysis for each variable cost for Maple Leaf Productions.
b. Prepare a fixed overhead cost variance analysis.
c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are
closed to cost of goods sold at the end of the operating period.
Transcribed Image Text:Maple Leaf Production manufactures truck tires. The following information is available for the last operating period. • Maple Leaf produced and sold 93,000 tires for $36 each. Budgeted production was 97,000 tires. • Standard variable costs per tire follow. Direct materials: 4 pounds at $2.00 Direct labor: 0.35 hours at $15.00 Variable production overhead: 0.10 machine-hours at $15 per hour Total variable costs Fixed production overhead costs: Monthly budget $1,458,000 • Fixed overhead is applied at the rate of $16.00 per tire. • Actual production costs: Direct materials purchased and used: 397,000 pounds at $1.70 Direct labor: 28,500 hours at $15.30 Variable overhead: 11,000 machine-hours at $15.70 per hour Fixed overhead $ 8.00 5.25 1.50 $14.75 674,900 436,050 172,700 1,459,000 Required: a. Prepare a cost variance analysis for each variable cost for Maple Leaf Productions. b. Prepare a fixed overhead cost variance analysis. c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are closed to cost of goods sold at the end of the operating period.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 10 images

Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education