Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Textbook Question
Chapter 10, Problem 4E
EXERCISE 10-4 Direct Labor and Variable Manufacturing
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows:
| Standard | Standard Rate | Standard |
| Hours | per Hour | Cost |
| 18 minutes | $17.00 | $5.10 |
During August 5,750 hours of direct labor time were needed to make 20,000 units of the Jogging Mate. The direct labor cost totaled $102,350 for the month.
Required:
- What is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates?
- What is the
standard labor cost allowed (SH x SR) to make 20,000 Jogging Mates? - What is the labor spending variance?
- What is the labor rate variance and the labor efficiency variance?
- The budgeted variable manufacturing overhead rate is $4 per direct labor-hour. During August, the company incurred $21,850 in variable
manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.
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Exercise 3 (Labor and Variable Overhead Variances)
Halliwell Audio, Inc., manufactures military-specification compact discs.
The company uses standards to control its costs. The labor standards that
have been set for one disc are as follows:
Standard Hours
Standard Cost
P2.40
Standard Rate per Hour
24 minutes
P6.00
During July, 8,500 hours of direct labor time were recorded to make 20,000
discs. The direct labor cost totaled P49,300 for the month.
Required:
1. What direct labor cost should have been incurred to make the 20,000
discs? By how much does this differ from the cost that was incurred?
2. Break down the difference in cost from (1) above into a labor rate
variance and a labor efficiency variance.
3. The budgeted variable manufacturing overhead rate is P4 per direct
labor-hour. During July, the company incurred P39,100 in variable
manufacturing overhead cost. Compute the variable overhead spending
and efficiency variances for the month.
Exercise 10-4 (Static) Direct Labor and Variable Manufacturing Overhead Variances [LO10-2, LO10-3]
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The
labor standards that have been set for one Jogging Mate are as follows:
Standard
Hours
18 minutes
Standard Rate
per Hour
$17.00
During August, 5,750 hours of direct labor time were needed to make 20,000 units of the Jogging Mate. The direct labor cost totaled
$102,350 for the month.
Standard
Cost
$5.10
Required:
1. What is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates?
2. What is the standard labor cost allowed (SH x SR) to make 20,000 Jogging Mates?
3. What is the labor spending variance?
4. What is the labor rate variance and the labor efficiency variance?
5. The budgeted variable manufacturing overhead rate is $4 per direct labor-hour. During August, the company incurred $21,850 in
variable manufacturing overhead cost. Compute the…
Exercise 10-4 (Algo) Direct Labor and Variable Manufacturing Overhead Variances [LO10-2, LO10-3] Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: During August, 9,105 hours of direct labor time were needed to make 19,100 units of the Jogging Mate. The direct labor cost totaled $51,899 for the month. Required: What is the standard labor-hours allowed (SH) to makes 19,100 Jogging Mates? What is the standard labor cost allowed (SH ×�� ) to make 19,100 Jogging Mates? What is the labor spending variance? What is the labor rate variance and the labor efficiency variance? The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $45,525 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5,…
Chapter 10 Solutions
Managerial Accounting
Ch. 10.A - EXERCISE 10A-1 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A-2 Predetermined Overhead Rate;...Ch. 10.A - Prob. 3ECh. 10.A - EXERCISE 10A-4 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A5 Using Fixed Overhead Variances LO104...Ch. 10.A - EXERCISE 10A-6 Predetermined Overhead Rate LO10-4...Ch. 10.A - EXERCISE 10A-7 Relations Among Fixed Overhead...Ch. 10.A - Prob. 8PCh. 10.A - PROBLEM 10A-9 Applying Overhead; Overhead...Ch. 10.A - PROBLEM 10A-10 Comprehensive Standard Cost...
Ch. 10.A -
PROBLEM 10A-11 Comprehensive Standard Cost...Ch. 10.A - Prob. 12PCh. 10.B - EXERCISE 10B-1 Standard Cost Flows; Income...Ch. 10.B - Prob. 2ECh. 10.B - Prob. 3ECh. 10.B - Prob. 4ECh. 10.B - Prob. 5PCh. 10.B - Prob. 6PCh. 10 - Prob. 1QCh. 10 - Why are separate price and quantity variances...Ch. 10 - 10-3 Who is generally responsible for the...Ch. 10 - The materials price variance can be computed at...Ch. 10 - 10-5 If the materials price variance is favorable...Ch. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - 10-8 What effect, if any, would you expect...Ch. 10 - 10-9 If variable manufacturing overhead is applied...Ch. 10 - 10-10 Why can undue emphasis on labor efficiency...Ch. 10 -
The Excel worksheet form that appears below is to...Ch. 10 - Prob. 2AECh. 10 - Prob. 1F15Ch. 10 - Prob. 2F15Ch. 10 - Prob. 3F15Ch. 10 - Prob. 4F15Ch. 10 - Prob. 5F15Ch. 10 - Prob. 6F15Ch. 10 - Prob. 7F15Ch. 10 - Prob. 8F15Ch. 10 - Prob. 9F15Ch. 10 - Preble Company manufactures one product. Its...Ch. 10 - Prob. 11F15Ch. 10 - Prob. 12F15Ch. 10 - Prob. 13F15Ch. 10 - Prob. 14F15Ch. 10 - Prob. 15F15Ch. 10 - EXERCISE 10-1 Direct Materials Variances LO10-1...Ch. 10 -
EXERCISE 10-2 Direct Labor Variances...Ch. 10 -
EXERCISE 10–3 Variable Overhead Variances...Ch. 10 - EXERCISE 10-4 Direct Labor and Variable...Ch. 10 -
EXERCISE 10-5 Working Backwards from Labor...Ch. 10 - EXERCISE 10-6 Direct Materials and Direct Labor...Ch. 10 - EXERCISE 10-7 Direct Materials Variances LOIO-1...Ch. 10 -
EXERCISE 10-8 Direct Materials and Direct Labor...Ch. 10 -
PROBLEM 10-9 Comprehensive Variance Analysis...Ch. 10 -
PROBLEM 10-10 Multiple Products, Materials, and...Ch. 10 - PROBLEM 10-11 Direct Materials and Direct Labor...Ch. 10 - PROBLEM 10-12 Variance Analysis in a...Ch. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - PROBLEM 10-15 Comprehensive Variance Analysis...Ch. 10 - Prob. 16PCh. 10 - Prob. 17C
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