Question:87 The following summarized manufacturing data relate to Kiosse Corporation's May operations, during which 2,000 finished units of product were produced. The normal monthly capacity is 1,100 direct labor hours. Direct material: Standard (3 lb. @ $2/lb.) Actual (6,200 lb. @ $2.20/lb.) Standard Units Costs Total Actual Costs $6 $ 13,640 Direct labor: Standard (0.5 hr. @ $14/hr.) $ 7 Actual (980 hrs. @ $13.70/hr.) $ 13,426 Variable overhead: Standard (0.5 hr. @ $4/hr.) $2 Actual $ 4,200 Total $ 15 $31,266 Assume that the 6,200 lb. of materials purchased were all used in producing the 2,000 completed units. Determine the materials price and efficiency variances, labor rate and efficiency variances, and variable overhead spending and efficiency variances. Goldman Company reported the following manufacturing overhead variances. Variable overhead cost variance $430 F Variable overhead efficiency variance $514 U Fixed overhead cost variance $670 U Fixed overhead volume variance $630 F 1. Record the journal entry to adjust Manufacturing Overhead. 2. Was Manufacturing Overhead overallocated or under-allocated?

Cornerstones of Cost Management (Cornerstones Series)
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Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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Question:87
The following summarized manufacturing data relate to Kiosse
Corporation's May operations, during which 2,000 finished units of
product were produced. The normal monthly capacity is 1,100 direct
labor hours.
Direct material:
Standard (3 lb. @ $2/lb.)
Actual (6,200 lb. @ $2.20/lb.)
Standard Units Costs Total Actual Costs
$6
$ 13,640
Direct labor:
Standard (0.5 hr. @ $14/hr.)
$ 7
Actual (980 hrs. @ $13.70/hr.)
$ 13,426
Variable overhead:
Standard (0.5 hr. @ $4/hr.)
$2
Actual
$ 4,200
Total
$ 15
$31,266
Assume that the 6,200 lb. of materials purchased were all used in
producing the 2,000 completed units. Determine the materials price and
efficiency variances, labor rate and efficiency variances, and variable
overhead spending and efficiency variances.
Goldman Company reported the following manufacturing overhead
variances.
Variable overhead cost variance
$430 F
Variable overhead efficiency variance
$514 U
Fixed overhead cost variance
$670 U
Fixed overhead volume variance
$630 F
1. Record the journal entry to adjust Manufacturing Overhead.
2. Was Manufacturing Overhead overallocated or under-allocated?
Transcribed Image Text:Question:87 The following summarized manufacturing data relate to Kiosse Corporation's May operations, during which 2,000 finished units of product were produced. The normal monthly capacity is 1,100 direct labor hours. Direct material: Standard (3 lb. @ $2/lb.) Actual (6,200 lb. @ $2.20/lb.) Standard Units Costs Total Actual Costs $6 $ 13,640 Direct labor: Standard (0.5 hr. @ $14/hr.) $ 7 Actual (980 hrs. @ $13.70/hr.) $ 13,426 Variable overhead: Standard (0.5 hr. @ $4/hr.) $2 Actual $ 4,200 Total $ 15 $31,266 Assume that the 6,200 lb. of materials purchased were all used in producing the 2,000 completed units. Determine the materials price and efficiency variances, labor rate and efficiency variances, and variable overhead spending and efficiency variances. Goldman Company reported the following manufacturing overhead variances. Variable overhead cost variance $430 F Variable overhead efficiency variance $514 U Fixed overhead cost variance $670 U Fixed overhead volume variance $630 F 1. Record the journal entry to adjust Manufacturing Overhead. 2. Was Manufacturing Overhead overallocated or under-allocated?
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