Maple Leaf Production manufactures truck tires. The following information is available for the last operating period. Maple Leaf produced and sold 92,000 tires for $40 each. Budgeted production was 100,000 tires.Standard variable costs per tire follow. Direct materials: 4 pounds at $2$8.00 Direct labor: 0.4 hours at $18 7.20 Variable production overhead: 0.18 machine-hours at $10 per hour 1.80 Total variable costs$17.00 Fixed production overhead costs:Monthly budget $1,350,000 Fixed overhead is applied at the rate of $15.00 per tire.Actual production costs: Direct materials purchased and used: 384,000 pounds at $1.80$691,200 Direct labor: 35,200 hours at $18.40 647,680 Variable overhead: 17,280 machine-hours at $10.20 per hour 176,256 Fixed overhead 1,360,000 Required:a. Prepare a cost variance analysis for each variable cost for Maple Leaf Productions.b. Prepare a fixed overhead cost variance analysis.c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are closed to cost of goods sold at the end of the operating period.

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Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 17P: Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per...

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Maple Leaf Production manufactures truck tires. The following information is available for the last operating period.

Maple Leaf produced and sold 92,000 tires for $40 each. Budgeted production was 100,000 tires.
Standard variable costs per tire follow.


Direct materials: 4 pounds at $2	$	8.00
Direct labor: 0.4 hours at $18		7.20
Variable production overhead: 0.18 machine-hours at $10 per hour		1.80
Total variable costs	$	17.00

Fixed production overhead costs:

Monthly budget $1,350,000

Fixed overhead is applied at the rate of $15.00 per tire.
Actual production costs:


Direct materials purchased and used: 384,000 pounds at $1.80	$	691,200
Direct labor: 35,200 hours at $18.40		647,680
Variable overhead: 17,280 machine-hours at $10.20 per hour		176,256
Fixed overhead		1,360,000

Required:

a. Prepare a cost variance analysis for each variable cost for Maple Leaf Productions.
b. Prepare a fixed overhead cost variance analysis.
c. (Appendix) Prepare the journal entries to record the activity for the last period using standard costing. Assume that all variances are closed to cost of goods sold at the end of the operating period.

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