Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of directlabor-hours. The following data are taken from the company’s budget for the current year:Denominator activity (direct labor-hours) ............... 5,000Variable manufacturing overhead cost .................. $25,000Fixed manufacturing overhead cost ...................... $59,000The standard cost card for the company’s only product is given below:Direct materials, 3 yards at $4.40 per yard ........................... $13.20Direct labor, 1 hour at $12 per hour ...................................... 12.00Manufacturing overhead, 140% of direct labor cost ............. 16.80Standard cost per unit .......................................................... $42.00During the year, the company produced 6,000 units of product and incurred the following costs:Materials purchased, 24,000 yards at $4.80 per yard ...... $115,200Materials used in production (in yards) ............................. 18,500Direct labor cost incurred, 5,800 hours at $13 per hour ... $75,400Variable manufacturing overhead cost incurred ............... $29,580Fixed manufacturing overhead cost incurred ................... $60,400Required:1. Redo the standard cost card in a clearer, more usable format by detailing the variable and fixedoverhead cost elements.2. Prepare an analysis of the variances for direct materials and direct labor for the year.3. Prepare an analysis of the variances for variable and fixed overhead for the year.4. What effect, if any, does the choice of a denominator activity level have on unit standard costs? Is thevolume variance a controllable variance from a spending point of view? Explain.

Question

Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of direct
labor-hours. The following data are taken from the company’s budget for the current year:
Denominator activity (direct labor-hours) ............... 5,000
Variable manufacturing overhead cost .................. $25,000
Fixed manufacturing overhead cost ...................... $59,000
The standard cost card for the company’s only product is given below:
Direct materials, 3 yards at $4.40 per yard ........................... $13.20
Direct labor, 1 hour at $12 per hour ...................................... 12.00
Manufacturing overhead, 140% of direct labor cost ............. 16.80
Standard cost per unit .......................................................... $42.00
During the year, the company produced 6,000 units of product and incurred the following costs:
Materials purchased, 24,000 yards at $4.80 per yard ...... $115,200
Materials used in production (in yards) ............................. 18,500
Direct labor cost incurred, 5,800 hours at $13 per hour ... $75,400
Variable manufacturing overhead cost incurred ............... $29,580
Fixed manufacturing overhead cost incurred ................... $60,400
Required:
1. Redo the standard cost card in a clearer, more usable format by detailing the variable and fixed
overhead cost elements.
2. Prepare an analysis of the variances for direct materials and direct labor for the year.
3. Prepare an analysis of the variances for variable and fixed overhead for the year.
4. What effect, if any, does the choice of a denominator activity level have on unit standard costs? Is the
volume variance a controllable variance from a spending point of view? Explain.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Other

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Should available-for-sale securities always be reported as a current asset? Explain.

A: Click to see the answer

Q: Differentiate between an originating temporary difference and a reversing difference.

A: Temporary differences: Temporary difference refers to the difference between the actual taxable lia...

Q: Flounder Corp. has income from continuing operations of $246,500 for the year ended December 31, 202...

A: Comprehensive Income includes Income statement and the other comprehensive income for the period end...

Q: What account would be debited (1), what account would be credit (2), and what amount would be paid t...

A: Bonds Bond is a long-term financial instrument issued by a company for which the company pays intere...

Q: Co. manufactures a single product in one department. All direct materials are added at the beginning...

A: TOTAl COST TO ACCOUNT FOR:           Cost of Beginning WIP   319940       Cost added during the ...

Q: All of the following are key similarities between GAAP and IFRS with respect to accounting for inves...

A: International Financial Reporting Standards (IFRS):  International Financial Reporting Standards is ...

Q: (Debtor/Creditor Entries for Continuation of Troubled Debt with New Effective Interest) Crocker Corp...

A: Click to see the answer

Q: Part 1: Fixed Assets Think of a business where you have worked, visited or perhaps hope to own one d...

A: Part 1: The business we are considering here is Mobile phones assembly unit. The main function of th...

Q: On March 10, 2017, Steele Company sold to Barr Hardware 200 tool sets at a price of $50 each (cost $...

A: (a) Prepare journal entries for Steele to record (1) the sale on March 10, 2017, (2) the return on M...

Q: Manual Company sells goods to Nolan Company during 2017. It offers Nolan the following rebates based...

A: Workings: Given values: for 10000 units rebate = 2 %

Q: On December 31, 2017, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zer...

A: (a) Prepare the entry (if any) to record the impairment of the loan on December 31, 2019, by Paris B...

Q: Rainmaker Company prepares its financial statements in accordance with IFRS. In 2017, Rainmaker reco...

A: Calculate the net revaluation gain: Net revaluation gain is calculated by deducting the declined val...

Q: Explain how to report various income items.

A: Introduction Income/Revenue is the money received from business/profession/service. There are many t...

Q: Entries for Installment Note Transactions On the first day of the fiscal year, Shiller Company borro...

A: Click to see the answer

Q: The production manager of Rordan Corporation has submitted the following forecast of units to be pro...

A: Labour cost is the amount to be paid to labour for hours worked. In labour cost budget, labour cost ...

Q: Selling, general, and administrative expenses were $149,600; net sales were $680,000; interest expen...

A: Formula: Sales - cost of goods sold = Gross profit. Gross profit - operating expenses = income from ...

Q: Selected hypothetical comparative statement data for the giant bookseller Barnes & Noble are pre...

A: Formulas:

Q: agroupof doctors operates a joint surgery they are planning to provide a private clinic where minor ...

A: Any investment in a business proposal requires careful analysis of the total amount of initial inves...

Q: On September 1, 1,500 shares of M Company stock are acquired at a price of $24 per share plus a $40 ...

A: When any security is acquired ,the cost of acquisition would include all brokerage and commission co...

Q: (Allocate Transaction Price, Discounts, Time Value) Grill Master Company sells total outdoor grillin...

A: a)

Q: The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/1...

A: Click to see the answer

Q: Accounting Question

A: Given information is: A business issued a 60-day, 7% note for $43000 to a creditor on account. At th...

Q: On 1 January 2020, Mamin Mali started a business by bringing in cash amounting to RM110,000.The natu...

A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...

Q: (Classification of Costs and Interest Capitalization) On January 1, 2017, Blair Corporation purchase...

A: Schedule for Cost of Land Cost of land and old building 500,000 Real estate broker's commission...

Q: What do statutes and accounting rules mandate about assessing an asset's span of economic value?

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions t...

Q: Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent Henry...

A: 1. (a1) The Journal entries and the computation are below: Calculation of Gilbert Capital: For Tren...

Q: Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, Year 1, Smiley...

A: Requirement A (1): Prepare the journal entry to record the issuance of bonds on April 1

Q: As the discount rate increases, the present value of a given future cash flow also increases. Doyou ...

A: No, I don’t agree with the statement. If the discount rate raises then the present value (PV) of giv...

Q: Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month f...

A: Workings: Given values: Budgeted sales for march is $ 17100

Q: This is a variation of E 8–1 modified to focus on the periodic inventory system.]John’s Specialty St...

A: John’s purchased merchandise on account for $5,000. Freight charges of $300 were paid in cash. Requi...

Q: What three transaction cycles exist in all businesses?

A: Transaction Process: Transaction process refers to a system that helps a business to process all th...

Q: What is the major disadvantage of the high-low method?

A: High-low method: High-low method is a method of calculating the variable cost and the fixed cost of ...

Q: Toby and Nancy are engaged and plan to get married. During 2019, Toby is a full-time student and ear...

A: 1) If Toby is filing the Single Return then his AGI, standard deduction, taxable income and income t...

Q: Briefly explain the circumstances in which you would (have to) use each of the three different “MACR...

A: MACRS (Modified Accelerated Cost Recovery System) is a method of depreciation used in United States....

Q: The general rule is that someone who inherits property has a tax basis in that property equal to its...

A: The inherited property is the property other than cash that a person receives after the death of the...

Q: Campus Cellular provides cell phones and 1 year of cell service to students for an upfront, nonrefun...

A: Given information is: Nonrefundable fees = $300 Usage fees per month = $5 On an average students ren...

Q: Wolsey Industries Inc. expects to maintain the same inventories at the end of 20Y8 as at the beginni...

A: As posted multiple sub parts we are answering only first three kindly repost the unanswered question...

Q: Bronson Industries reported a deferred tax liability of $8 million for the year ended December 31, 2...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: What is lapping?

A: Definition: Lapping: Lapping is an accounting fraud in which an employee steals cash from accounts r...

Q: The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and ba...

A: In a partnership, two or more parties agree to operate and manage a business and share the profits o...

Q: Bryce Co. sales are $848,000, variable costs are $466,300, and operating income is $229,000. What is...

A: Formulas: Contribution margin ratio = (Sales - variable cost)/ Sales Contribution margin ratio = Con...

Q: The following information is available from Gray Co.'s accounting records for the year ended Decembe...

A: Formula: Net cash provided by operating activities = Collection from customers  - Net cash paid to s...

Q: Condensed balance sheet and income statement data for Pina Corporation are presented here. PINA...

A: As posted multiple sub parts we are answering only first three kindly repost the unanswered question...

Q: The following describes the revenue cycle procedures for a hypothetical company.The sales department...

A: Transaction Processing System: Transaction processing system refers to a system that helps an organ...