Hw.21. 2. Calculate the labour rate variance and labour efficiency variance? (Indicate the effect of each variance by selecting "F" forfavourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)Labour rate varianceLabour efficiency variance3. Compute the variable overhead spending and efficiency variances for the month, (Indicate the effect of each variance by selecting"F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)Variable overhead spending varianceVariable overhead efficiency variance4. Suppose the static budget volume is 15,000 players-this is the denominator volume. Compute the volume variance for fixedoverhead cost. (Round intermediate calculations to the nearest whole dollar amount. Indicate the effect of each variance byselecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)Volume variance5. Suppose that the static budget volume is also the normal volume and that the budgeted variable overhead cost in the static budgetis $25,500, Given the standard cost card data in the question, calculate the under- or overapplied fixed overhead for August. (Do notround intermediate calculations.)Fixed overhead Erie Company manufactures an MP3 player called the Jogging Mate. The company uses standards to control its costs. The labour andvariable overhead standards that have been set for one Jogging Mate MP3 player are as follows:Direct labourVariable overheadStandard Hours18 minutes18 minutesDirect labour costStandard Rateper Hour$9.00$5.00Budgeted fixed overhead was estimated to be $15,300 per month. Fixed overhead cost is applied using direct labour-hours. DuringAugust, 4,550 hours of direct labour time was recorded in the manufacture of 16,000 units of the Jogging Mate. The direct labour costtotalled $49,100 for the month. Actual variable overhead and fixed overhead costs were $17,290 and $25,600, respectively.Standard Cost$2.70$ 1.50Required:1-a. What direct labour cost should have been incurred in the manufacture of the 16,000 units of the Jogging Mate? (Do not roundintermediate calculations.)Variance1-b. Calculate the total direct labor cost variance? (Do not round intermediate calculations. Indicate the effect of each variance byselecting "F" for favourable, "U" for unfavourable, and "None" for no effect (ie, zero variance).)

Name: Hw.21. 2. Calculate the labour rate variance and labour efficiency var
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Description: Hw.21. 2. Calculate the labour rate variance and labour efficiency variance? (Indicate the effect of each variance by selecting "F" forfavourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)Labour rate varianceLabour effici

Standard cost means the cost which the company is expecting to be incurred on the basis of…

Business

Accounting

2. Calculate the labour rate variance and labour efficiency variance? (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variance 3. Compute the variable overhead spending and efficiency variances for the month, (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Variable overhead spending variance Variable overhead efficiency variance

2. Calculate the labour rate variance and labour efficiency variance? (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variance 3. Compute the variable overhead spending and efficiency variances for the month, (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Variable overhead spending variance Variable overhead efficiency variance

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 13EA: Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total...

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Cozy, Inc., manufactures small and large blankets. It estimates $950,000 in overhead during the manufacturing of 360,000 small blankets and 120,000 large blankets. What is the predetermined overhead rate if a small blanket takes 2 hours of direct labor and a large blanket takes 3 hours of direct labor?
York Company Is a machine shop that estimated overhead will be $50,000, consisting of 5,000 hours of direct labor. The cost to make job 0325 is $70 in aluminum and two hours of labor at $20 per hour. During the month. York incurs $50 in indirect material cost. $150 in administrative labor, $300 in utilities, and $250 in depreciation expense. What is the predetermined overhead rate if direct labor hours are considered the cost driver? What is the cost of Job 0325? What is the overhead incurred during the month?
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
Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?
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San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)
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Chester Company provided information on overhead for its three producing departments as follows: Overhead is applied on the basis of machine hours in Fabricating and direct labor hours in Assembly and in Finishing. Job #13-198 had total prime cost of 6,700. The job took 40 machine hours in Fabricating, 100 direct labor hours in Assembly, and 20 direct labor hours in Finishing. What is the total cost of Job# 13-198? a. 6,700.00 b. 1,523.20 c. 8,223.20 d. 7,383.20
Brees, Inc., a manufacturer of golf carts, has just received an offer from a supplier to provide 2,600 units of a component used in its main product. The component is a track assembly that is currently produced internally. The supplier has offered to sell the track assembly for 66 per unit. Brees is currently using a traditional, unit-based costing system that assigns overhead to jobs on the basis of direct labor hours. The estimated traditional full cost of producing the track assembly is as follows: Prior to making a decision, the companys CEO commissioned a special study to see whether there would be any decrease in the fixed overhead costs. The results of the study revealed the following: 3 setups1,160 each (The setups would be avoided, and total spending could be reduced by 1,160 per setup.) One half-time inspector is needed. The company already uses part-time inspectors hired through a temporary employment agency. The yearly cost of the part-time inspectors for the track assembly operation is 12,300 and could be totally avoided if the part were purchased. Engineering work: 470 hours, 45/hour. (Although the work decreases by 470 hours, the engineer assigned to the track assembly line also spends time on other products, and there would be no reduction in his salary.) 75 fewer material moves at 30 per move. Required: 1. Ignore the special study, and determine whether the track assembly should be produced internally or purchased from the supplier. 2. Now, using the special study data, repeat the analysis. 3. Discuss the qualitative factors that would affect the decision, including strategic implications. 4. After reviewing the special study, the controller made the following remark: This study ignores the additional activity demands that purchasing would cause. For example, although the demand for inspecting the part on the production floor decreases, we may need to inspect the incoming parts in the receiving area. Will we actually save any inspection costs? Is the controller right?
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