Manufacturing overhead data for the production of Product H by Jennifer Company, assuming the company uses a standard costsystem, are as follows.Overhead incurred for 52,600 actual direct labor hours worked$319,320Overhead rate (variable $4; fixed $2) at normal capacity of 50,000 direct labor hours$6Standard hours allowed for work done53,320Compute the total overhead variance.Total overhead variance$

To calculate the total overhead variance, we will be using the following formula: Total overhead…

Answered: Manufacturing overhead data for the…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 4BE: Factory overhead volume variance Bellingham Company produced 15,000 units of product that required 4...

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Similar questions

Materials and labor variances Fausto Fabricators Inc. uses a standard cost system to account for its single product. The standards established for the product include the following: The following operating data came from the records for the month: In process, beginning inventory, none. In process, ending inventory, 800 units, 80% complete as to labor; material is issued at the beginning of processing. Completed during the month, 5,600 units. Materials issued to production were 51,680 lb @ .55 per pound. Direct labor was 384,000 for 40,000 hours worked. Required: Calculate the following variances, using the diagram format in Figure 8-4. 1. Materials price. 2. Materials quantity. 3. Net materials variance. 4. Labor rate. 5. Labor efficiency. 6. Net labor variance. (Hint: Before determining the standard quantity for materials and labor, you must first compute the equivalent units of production for materials and labor.)
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Calculating amount of factory overhead applied to work in process The overhead application rate for a company is 2.50 per unit, made up of 1.00 for fixed overhead and 1.50 for variable overhead. Normal capacity is 10,000 units. In one month, there was an unfavorable flexible budget variance of 200. Actual overhead for the month was 27,000. What was the amount of the budgeted overhead for the actual level of production?
Cost and production data for Binghamton Beverages Inc. are presented as follows: Required: Calculate net variances for materials, labor, and factory overhead. Calculate specific materials and labor variances by department, using the diagram format in Figure 8-4. Comment on the possible causes for each of the variances that you computed. Make all journal entries to record production costs in Work in Process and Finished Goods. Determine the balance of ending Work in Process in each department. Assume that 4,000 units were sold at $40 each. Calculate the gross margin based on standard cost. Calculate the gross margin based on actual cost. Why does the gross margin at actual cost differ from the gross margin at standard cost. As the plant controller, you present the variance report in Item 1 above to Paul Crooke, the plant manager. After reading it, Paul states: “If we present this performance report to corporate with that large unfavorable labor variance in Blending, nobody in the plant will receive a bonus. Those standard hours of 5,500 are way too tight for this production process. Fifty-eight hundred hours would be more reasonable, and that would result in a favorable labor efficiency variance that would more than offset the unfavorable labor rate variance. Please redo the variance calculations using 5,800 hours as the standard.” You object, but Paul ends the conversation with, “That is an order.” What standards of ethical professional practice would be violated if you adhered to Paul’s order? How would you attempt to resolve this ethical conflict?
Eagle Inc. uses a standard cost system. During the most recent period, the company manufactured 115,000 units. The standard cost sheet indicates that the standard direct labor cost per unit is $1.50. The performance report for the period includes an unfavorable direct labor rate variance of $3,700 and a favorable direct labor time variance of $10,275. What was the total actual cost of direct labor incurred during the period?
Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 40,000 units of product were as follows: Each unit requires 0.3 hour of direct labor. Instructions Determine (A) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; (B) the direct labor rate variance, direct labor time variance, and total direct labor cost variance; and (C) the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.
Direct materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Instructions Determine (A) the standard cost per unit for direct materials and direct labor; (B) the price variance, quantity variance, and total direct materials cost variance; and (C) the rate variance, time variance, and total direct labor cost variance.
Factory overhead volume variance Bellingham Company produced 15,000 units of product that required 4 standard direct labor hours per unit. The standard fixed overhead cost per unit is 1.15 per direct labor hour at 58,000 hours, which is 100% of normal capacity. Determine the fixed factory overhead volume variance.
Factory overhead cost variance report Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at 100% of normal capacity of 30,000 hours. During October, the department operated at 28,500 hours, and the factory overhead costs incurred were indirect factory wages, 234,000; power and light, 178,500; indirect materials, 50,600; supervisory salaries, 126,000; depreciation of plant and equipment, 70,000; and insurance and property taxes, 44,000. Instructions Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 28,500 hours.
The standard specifications for an electric motor manufactured by XYZ Electric Co. follow: Factory overhead rates are based on a normal 70% capacity and use the following flexible budget: The actual production was 2,500 motors, and factory overhead costs totaled $29,750. Required: Calculate the factory overhead variances using the two-variance method and the diagram format.
Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: During the year, the company had the following activity: Actual fixed overhead was 12,000 less than budgeted fixed overhead. Budgeted variable overhead was 5,000 less than the actual variable overhead. The company used an expected actual activity level of 12,000 direct labor hours to compute the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required: 1. Compute the unit cost using (a) absorption costing and (b) variable costing. 2. Prepare an absorption-costing income statement. 3. Prepare a variable-costing income statement. 4. Reconcile the difference between the two income statements.
Misterio Company uses a standard costing system. During the past quarter, the following variances were computed: Misterio applies variable overhead using a standard rate of 2 per direct labor hour allowed. Two direct labor hours are allowed per unit produced. (Only one type of product is manufactured.) During the quarter, Misterio used 30 percent more direct labor hours than should have been used. Required: 1. What were the actual direct labor hours worked? The total hours allowed? 2. What is the standard hourly rate for direct labor? The actual hourly rate? 3. How many actual units were produced?

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