Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 8, Problem 8.44P
Review of Chapters 7 and 8, 3-variance analysis. (CPA, adapted) The Beal Manufacturing Company’s costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing
| Input | Cost per Output Unit | |
| Direct materials | 5 lb. at $4 per lb. | $ 20.00 |
| Direct manufacturing labor | 4 hrs. at $16 per hr. | 64.00 |
| Manufacturing overhead: | ||
| Variable | $8 per DLH | 32.00 |
| Fixed | $9 per DLH | 36.00 |
| $152.00 |
The denominator level for total manufacturing overhead per month in 2017 is 37,000 direct manufacturing labor-hours. Beal’s budget for January 2017 was based on this denominator level. The records for January indicated the following:
| Direct materials purchased | 40,300 lb. at $3.80 per lb. |
| Direct materials used | 37,300 lb. |
| Direct manufacturing labor | 31,400 hrs. at $16.25 per hr. |
| Total actual manufacturing overhead (variable and fixed) | $650,000 |
| Actual production | 7,600 output units |
- A. Prepare a schedule of total standard manufacturing costs for the 7,600 output units in January 2017.
Required
- B. For the month of January 2017, compute the following variances, indicating whether each is favorable (F) or unfavorable (U):
- a. Direct materials price variance, based on purchases
- b. Direct materials efficiency variance
- c. Direct manufacturing labor price variance
- d. Direct manufacturing labor efficiency variance
- e. Total manufacturing overhead spending variance
- f. Variable manufacturing overhead efficiency variance
- g. Production-volume variance
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Review of Chapters 7 and 8, 3-variance analysis. (CPA, adapted) The Beal Manufacturing Company’s costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor-hours (DLH). At the beginning of 2017, Beal adopted the following standards for its manufacturing costs:
Quality Fender uses a standard cost system and provide the following information:
1(Click
the icon to view the information.)
Quality
Fender allocates manufacturing overhead to production based on standard direct labor hours.
Quality
Fender reported the following actual results for
2024:
actual number of fenders produced,
20,000;
actual variable overhead,
$4,610;
actual fixed overhead,
$24,000;
actual direct labor hours,
360.
Read the
requirements2.
Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U).(You may need to simply the formula based on the data provided. Abbreviations used:…
Cruise Manufacturing has two direct cost categories direct materials and direct labor costs. The company's variable manufacturing overhead is allocated to products based on standard direct labor hours. The following information indicates the standards of Cruise's manufacturing costs
Direct Cost Categories.
Standard Quantity
Cost
per Input Unit
pound
Direct Materials 12 pounds per output unit $15 per
Direct Labor 3 hours per output unit $21 per hour
Manufacturing Overhead
Cost per Input Unit
Variable Manufacturing Overhead $12 per Direct Labor Hour
By the end of Apr 2019 Cruise Manufacturing records indicated the following
Direct materials purchased and used
Direct labor
Total actual variable manufacturing overhead
Actual production
$11.44 per pound
95,000 pounds
$22 per hour 48,000 labor hours
Do not enter dollar signs or commas in the input boxes
Round all answers to the nearest whole number
Enter the variances as positive values.
Calculate the following variances.
al Direct materials…
Chapter 8 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 8 - How do managers plan for variable overhead costs?Ch. 8 - How does the planning of fixed overhead costs...Ch. 8 - How does standard costing differ from actual...Ch. 8 - What are the steps in developing a budgeted...Ch. 8 - What are the factors that affect the spending...Ch. 8 - Assume variable manufacturing overhead is...Ch. 8 - Describe the difference between a direct materials...Ch. 8 - What are the steps in developing a budgeted fixed...Ch. 8 - Why is the flexible-budget variance the same...Ch. 8 - Explain how the analysis of fixed manufacturing...
Ch. 8 - Provide one caveat that will affect whether a...Ch. 8 - The production-volume variance should always be...Ch. 8 - What are the variances in a 4-variance analysis?Ch. 8 - Overhead variances should be viewed as...Ch. 8 - Describe how flexible-budget variance analysis can...Ch. 8 - Each of the following statements is correct...Ch. 8 - Steed Co. budgets production of 150,000 units in...Ch. 8 - As part of her annual review of her companys...Ch. 8 - Culpepper Corporation had the following...Ch. 8 - Fordham Corporation produces a single product. The...Ch. 8 - Variable manufacturing overhead, variance...Ch. 8 - Fixed manufacturing overhead, variance analysis...Ch. 8 - Variable manufacturing overhead variance analysis....Ch. 8 - Fixed manufacturing overhead variance analysis...Ch. 8 - Manufacturing overhead, variance analysis. The...Ch. 8 - 4-variance analysis, fill in the blanks. ProChem...Ch. 8 - Straightforward 4-variance overhead analysis. The...Ch. 8 - Straightforward coverage of manufacturing...Ch. 8 - Overhead variances, service sector. Meals Made...Ch. 8 - Total overhead, 3-variance analysis. Pampered...Ch. 8 - Production-volume variance analysis and...Ch. 8 - Overhead variances, service setting. Carlyle...Ch. 8 - Identifying favorable and unfavorable variances....Ch. 8 - Flexible-budget variances, review of Chapters 7...Ch. 8 - Comprehensive variance analysis. Cooking Whiz...Ch. 8 - Journal entries (continuation of 8-35). A. Prepare...Ch. 8 - Graphs and overhead variances. Best Around, Inc.,...Ch. 8 - Overhead variance, missing information. Consider...Ch. 8 - Flexible budgets, 4-variance analysis. (CMA,...Ch. 8 - Activity-based costing, batch-level variance...Ch. 8 - Overhead variances and sales-volume variance. The...Ch. 8 - Activity-based costing, batch-level variance...Ch. 8 - Comprehensive review of Chapters 7 and 8, working...Ch. 8 - Review of Chapters 7 and 8, 3-variance analysis....Ch. 8 - Nonfinancial variances. Kathys Kettle Potato Chips...Ch. 8 - Overhead variances, service sector. Cavio is a...Ch. 8 - Direct-cost and overhead variances, income...Ch. 8 - Overhead variances, ethics. Carpenter Company uses...
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