W uli Steep Enterprises machines heavy-duty brake rotors that are used on commercial airliners. Steep's management developed the following standard costs: Standard direct labor hours per rotor Standard variable overhead rate per direct labor hour 1.9 $9.00 Actual activity for October. Actual variable overhead costs incurred Actual direct labor hours Actual rotors machined What is the variable manufacturing overhead rate variance in October? A. $42,750 favorable OB. $42,750 unfavorable C. $57,000 favorable D. $57,000 unfavorable $159,600 11,400 3,500

W uli Steep Enterprises machines heavy-duty brake rotors that are used on commercial airliners. Steep's management developed the following standard costs: Standard direct labor hours per rotor Standard variable overhead rate per direct labor hour 1.9 $9.00 Actual activity for October. Actual variable overhead costs incurred Actual direct labor hours Actual rotors machined What is the variable manufacturing overhead rate variance in October? A. $42,750 favorable OB. $42,750 unfavorable C. $57,000 favorable D. $57,000 unfavorable $159,600 11,400 3,500

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Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 58E: At the beginning of the year, Lopez Company had the following standard cost sheet for one of its...

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Fitzgerald Company manufactures sewing machines, and they produced 2,500 this past month. The standard variable manufacturing overhead (M0H) rate used by the company is $6.75 per machine hour. Each sewing machine requires 13.5 machine hours. Actual machine hours used last month were 33,500, and the actual variable MOH rate last month was $7.00. Calculate the variable overhead rate variance and the variable overhead efficiency variance.
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of household cleaning products. Palladiums controller has developed standard costs for the following four overhead items: Next year, Palladium expects production to require 90,000 direct labor hours. Exercise 9-64 Performance Report Based on Actual Production Refer to the information for Palladium Inc. above. Assume that actual production required 93,000 direct labor hours at standard. The actual overhead costs incurred were as follows: Required: Prepare a performance report for the period based on actual production.
Case made 24,500 units during June, using 32,000 direct labor hours. They expected to use 31,450 hours per the standard cost card. Their employees were paid $15.75 per hour for the month of June. The standard cost card uses $15.50 as the standard hourly rate. A. Compute the direct labor rate and time variances for the month of June, and also calculate the total direct labor variance. B. If the standard rate per hour was $16.00, what would change?
Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.
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?
ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc. had budgeted $27,000 for fixed overhead. Actual machine hours were 5.000. Standard hours for units made were 4,800. The standard variable overhead rate was $4.10. What is the variable overhead rate variance?
SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Terrell Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Variable manufacturing overhead O $46 U $2.30 per hour The company has reported the following actual results for the product for July: Actual output Actual direct labor-hours Actual variable overhead rate S 2.10 per hour Actual variable overhead cost $ 4,998 The variable overhead efficiency variance for the month is closest to: $42 F Standard Quantity or Hours per Unit of Output O $46 F O $42 U Standard Price or Rate 0.30 hours 8,000 units 2,380 hours
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. Standard hours per unit of output Standard variable overhead rate 3.60 DLHS $10.95 per DLH The following data pertain to operations for the last month: Actual direct labor-hours Actual total variable manufacturing overhead cost Actual output What is the variable overhead efficiency variance for the month? Multiple Choice $6,789 U $7,213 F $3,592 U $7,213 U 8,900 DLHS $ 95,820 2,300 units
Use the following information for Questions 18 & 19 18. 19. The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July: C. d. The variable overhead efficiency variance for July is: a. $600 U b. $540 U $540 F $600 F ● a. b. Actual variable manufacturing overhead cost incurred: $11,310 Actual machine-hours worked: 1,600 hours Variable overhead rate variance: $1,710 U Total variable overhead spending variance: $2,310 U The standard number of machine-hours allowed for July production is closest to: 1,600 hours 1,700 hours C. d. 1,300 hours 1,500 hours
Lamp Light Limited (LLL) manufactures lampshades. It applies variable overhead on the basis of direct labor hours. Inform LLL's standard cost card follows: Variable manufacturing overhead During August, LLL had the following actual results: Units produced and sold Actual variable overhead Actual direct labor hours Standard Quantity 0.6 Variable Overhead Rate Variance Variable Overhead Efficiency Variance Variable Overhead Spending Variance 26,300 $ 9,590 17,000 Standard Rate $0.80 Standard. Unit Cost $0.48 Required: Compute LLL's variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" unfavorable, and "None" for no effect (i.e., zero variance).