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?

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)

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 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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Standard unit cost and journal entries The normal capacity of Algonquin Adhesives Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb of materials at an estimated cost of 2 per pound. The estimated cost of labor is 10.00 per hour. The plant estimates that overhead (all variable) for a month will be 40,000. During the month of March, the plant totaled 34,800 direct labor hours at an average rate of 9.50 an hour. The plant produced 18,000 units, using 105,000 lb of materials at a cost of 2.04 per pound. 1. Prepare a standard cost summary showing the standard unit cost. 2. Make journal entries to charge materials and labor to Work in Process.
Standard cost journal entries Bellingham Company produced 15,000 units that require 2.5 standard pounds per unit at a 3.75 standard price per pound. The company actually used 36,000 pounds in production. Journalize the entry to record the standard direct materials used in production.
Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
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.
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
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Production costs incurred in the manufacture of 2,400 units of a product in a period are: $ Direct costs 19,680 Variable overheads 3,120 Fixed overheads 14,640 What would be the expected total cost of manufacturing 2,300 units of the product in a period? $35,880 $36,490 $36,620 $37,310
The following labor standards have been established for a particular product: Standard labor-hours per unit of output 8.6 hours Standard labor rate $15.50 per hour The following data pertaln to operatlons concerning the product for the last month: Actual hours worked 8,500 hours Actual total labor cost $129, 200 Actual output 840 units What is the labor rate varlance for the month? Multiple Cholce $17.228 F $19,395 U $17,228 U $2,550 F