
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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:LOADING...
(ClickRead the
requirements
LOADING...
.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.)
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Formula
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Variance
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Direct materials cost variance
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Direct labor cost variance
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=
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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.)
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Formula
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Variance
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Direct materials efficiency variance
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Direct labor efficiency variance
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Transcribed Image Text: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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