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Crenshaw Manufacturing, Inc. planned to produce 25,000 units of its only product during the year. The standard cost data for this product are as follows: Direct materials (3 lb. @ $2 per lb.) Direct labor (0.5 hr. @ $8 per hr.).. Variable overhead (0.5 hr. @ $4 per hr.) Total standard cost per unit ******** ********* ******* ****** Direct materials (74,000 lb. @ $1.80).. Direct labor (13,000 hr. @ $8.10). Variable overhead Total actual cost *** *************** **** ************ .... ********** The actual level of production was 24,000 units, with the following actual total costs incurred: ************** Per Unit $6 ************* *************** $12 Total Cost $133,200 105,300 50,200 $288,700 Required a. Calculate the variances for materials, labor, and variable overhead. b. Is the difference between total actual cost and total standard cost equal to the sum of all the variances? Why?

Crenshaw Manufacturing, Inc. planned to produce 25,000 units of its only product during the year. The standard cost data for this product are as follows: Direct materials (3 lb. @ $2 per lb.) Direct labor (0.5 hr. @ $8 per hr.).. Variable overhead (0.5 hr. @ $4 per hr.) Total standard cost per unit ******** ********* ******* ****** Direct materials (74,000 lb. @ $1.80).. Direct labor (13,000 hr. @ $8.10). Variable overhead Total actual cost *** *************** **** ************ .... ********** The actual level of production was 24,000 units, with the following actual total costs incurred: ************** Per Unit $6 ************* *************** $12 Total Cost $133,200 105,300 50,200 $288,700 Required a. Calculate the variances for materials, labor, and variable overhead. b. Is the difference between total actual cost and total standard cost equal to the sum of all the variances? Why?

Managerial Accounting: The Cornerstone of Business Decision-Making
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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Crenshaw Manufacturing, Inc. planned to produce 25,000 units of its only product during the year. The standard cost data for this product are as follows: Direct materials (3 lb. @ $2 per lb.) Direct labor (0.5 hr. @ $8 per hr.).. Variable overhead (0.5 hr. @ $4 per hr.) Total standard cost per unit. ****... The actual level of production was 24,000 units, with the following actual total costs incurred: Total Cost $133,200 105,300 50,200 $288,700 Direct materials (74,000 lb. @ $1.80). Direct labor (13,000 hr. @ $8.10). Variable overhead Total actual cost ****** ..... Per Unit $6 4 2 $12 ... Required a. Calculate the variances for materials, labor, and variable overhead. b. Is the difference between total actual cost and total standard cost equal to the sum of all the variances? Why?
Transcribed Image Text:Crenshaw Manufacturing, Inc. planned to produce 25,000 units of its only product during the year. The standard cost data for this product are as follows: Direct materials (3 lb. @ $2 per lb.) Direct labor (0.5 hr. @ $8 per hr.).. Variable overhead (0.5 hr. @ $4 per hr.) Total standard cost per unit. ****... The actual level of production was 24,000 units, with the following actual total costs incurred: Total Cost $133,200 105,300 50,200 $288,700 Direct materials (74,000 lb. @ $1.80). Direct labor (13,000 hr. @ $8.10). Variable overhead Total actual cost ****** ..... Per Unit $6 4 2 $12 ... Required a. Calculate the variances for materials, labor, and variable overhead. b. Is the difference between total actual cost and total standard cost equal to the sum of all the variances? Why?
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