Answered: Data Table dphd he d Standard Cost…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Question

HeadsetHeadset

manufactures headphone cases. During September

20182018,

the company produced and sold

108 comma 000108,000

cases and recorded the following cost data:

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the icon to view the cost data.)

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requirements

Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor.

Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U).(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)

		Formula		Variance
Direct materials cost variance	=		=
Direct labor cost variance	=		=

Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U).(Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.)

		Formula		Variance
Direct materials efficiency variance	=		=
Direct labor efficiency variance	=		=

Data Table
dphd
he d
Standard Cost Information
Quantity
Cost
he c
Direct Materials
2 parts $
0.15 per part
es. S
Direct Labor
0.02 hours
7.00 per hour
(U)
Variable Manufacturing Overhead
0.02 hours
10.00 per hour
ce
Fixed Manufacturing Overhead ($31,360 for static budget volume
of 98,000 units and 1,960 hours, or $16 per hour)
var
unfa
Actual Cost Information
Direct Materials
(212,000 parts @
2$
0.20 per part)
42,400
Direct Labor
(1,660 hours @
7.15 per hour)
11,869
varia
Variable Manufacturing Overhead
8,000
nce
Fixed Manufacturing Overhead
28,000
nter
Print
Done

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