Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budge volume of 59,700 coffee mugs per month:4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process InventoryJournalize the adjusting of the Manufacturing Overhead account . 5. Rouse intentionally hired more highly skilled workers during JulyHow did this decision affect the cost variances ? Overall , was the decision wise? - X- XData TableMore InfoDirect Materials (0.2 Ibs @ $0.25 per Ib)2$0.05There were no beginning or ending inventory balances. All expenditures were onaccountActual production and sales were 62,400 coffee mugs.a.Direct Labor (3 minutes @ $0.12 per minute)0.36b.Manufacturing Overhead:Actual direct materials usage was 10,000 Ibs, at an actual cost of $0.17 per Ib.C.Variable (3 minutes @ $0.04 per minute)$ 0.12d. Actual direct labor usage was 203,000 minutes at a total cost of $28,420.0.390.51e. Actual overhead cost was $6,090 variable and $34,610 fixed.Fixed (3 minutes @ $0.13 per minute)f. Selling and administrative costs were $131,000.$ 0.92Total Cost per Coffee MugPrintDonePrintDone

Variable overhead spending variance = 6090 - ( 203000 /3 * 0.12 ) = 2030 Favorable Variable overhead…

Data Table More Info Direct Materials (0.2 Ibs @ $0.25 per Ib) $ 0.05 There were no beginning or ending inventory balances. All expenditures were on account. a. Direct Labor (3 minutes @ $0.12 per minute) 0.36 b. Actual production and sales were 62,400 coffee mugs. C. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per Ib. d. Actual direct labor usage was 203,000 minutes at a total cost of $28.420. Manufacturing Overhead: Variable (3 minutes @ $0.04 per minute) $ 0.12 e. Actual overhead cost was $6,090 variable and $34,610 fixed f. Selling and administrative costs were $131,000. 0.39 051 Fixed (3 minutes@ $0.13 per minute) 2$ 0.92 Total Cost per Coffee Mug Print Done Print Done

Data Table More Info Direct Materials (0.2 Ibs @ $0.25 per Ib) $ 0.05 There were no beginning or ending inventory balances. All expenditures were on account. a. Direct Labor (3 minutes @ $0.12 per minute) 0.36 b. Actual production and sales were 62,400 coffee mugs. C. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per Ib. d. Actual direct labor usage was 203,000 minutes at a total cost of $28.420. Manufacturing Overhead: Variable (3 minutes @ $0.04 per minute) $ 0.12 e. Actual overhead cost was $6,090 variable and $34,610 fixed f. Selling and administrative costs were $131,000. 0.39 051 Fixed (3 minutes@ $0.13 per minute) 2$ 0.92 Total Cost per Coffee Mug Print Done Print Done

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 10MC: Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the...

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