Copdog +Question 8 of 8Crane Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. InMay 2022, 10,200 suits were produced. The following standard and actual cost data applied to the month of May, when normalcapacity was 13,770 direct labor hours. All materials purchased were used.Cost ElementDirectmaterials.Direct laborOverhead8 yards at $4.10 per yard1.45 hours at $13.30 per hour1.45 hours at $7.60 per hour (fixed $4.60; variable$3.00)Standard (per unit)Compute the overhead controllable variance and the overhead volume variance.Overhead controllable variance $Overhead volume varianceOverhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $63,342, and budgetedvariable overhead was $41,310.$Actual$320,970 for 82,300 yards ($3.90 per yard)$213,583 for 15,590 hours ($13.70 per hour)$49,800 fixed overhead $36,500 variableoverheadI

The variance arises when the actual cost is different from the budgeted cost. The variance is…

Answered: Question 8 of 8 < Crane Clothiers is a…

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 20E

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SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Spoiled work Roger Company manufactures tennis clothing. During the month, the company cut and assembled 8,000 skirts. One hundred of the skirts did not meet specifications and were considered seconds. Seconds are sold for 9.95 per skirt, whereas first-quality skirts sell for 39.95. During the month, Work in Process was charged 108,000: 36,000 for materials, 48,000 for labor, and 24,000 for factory overhead. Record the entries to first charge production costs for the period and to then record the loss due to spoiled work, under each of the following conditions: a. The loss due to spoiled work is spread over all jobs in the department. b. The loss due to spoiled work is charged to the specific job because it is a special order.
Crafts 4 All has these costs associated with production of 12,000 units of accessory products: direct materials, $19; direct labor, $30; variable manufacturing overhead, $15; total fixed manufacturing overhead, $450,000. What is the cost per unit under both the variable and absorption methods?
Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What do you think is a possible solution?
Factory overhead rate Fabricator Inc., a specialized equipment manufacturer, uses a job order cost system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn't make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to "design out" direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won't be surprised if next year the rate is $4,000 per direct labor hour. I'm also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30~minute error in our estimate of assembly time is worth $ 1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business. What did the engineer mean about the large overhead rate being a disadvantage when plating bids and seeking new business?
Item 3 Dawson Toys, Ltd., produces a toy called the Maze. The company has recently created a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 6 microns per toy at $0.32 per micron Direct labor: 1.3 hours per toy at $6.70 per hour During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows: Direct materials: 73,000 microns were purchased at a cost of $0.30 per micron. 32,500 of these microns were still in inventory at the end of the month. Direct labor: 7,420 direct labor-hours were worked at a cost of $52,682. Required: 1. Compute the following variances for July: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.) a. The materials price…
problem 5 Marites Company employs standard absorption system for product costing. The standard cost of this product is as follows: Raw Materials – P14.50; Direct Labor for 2 hours @ P8/hr is P16; Manufacturing overhead for 2 hours @ P11/hr is P22. The total cost/unit (14.50+16+22) = P52.50. The manufacturing overhead rate is based upon normal annual activity level of 600,000 direct labor hours. The company planned to produce 25,000 units each month during 2020. Budgeted factory overhead for 2020 is composed of P3,600,000 variable and P3,000,000 fixed. During April 2021, 26,000 units of product were produced using 53,500 direct labor hours at a cost of P433,350. Actual manufacturing overhead for the month was P260,000 fixed and P315,000 variable. The total manufacturing overhead applied during April was P572,000. The variable overhead spending variance must be:
Q32 Shoemaker Perkins Company uses a standard cost system and had 500 pounds of raw material X15 on hand on September 1. The standard cost of X15 is $10 per pound. The production standard calls for 2 pounds of material X15 for each unit of product manufactured. The company manufactured 700 units of the product in September, and had 700 pounds of material X15 in stock on September 30. The actual price for material X15 purchased during the month was $1 per pound below the standard cost. The material usage variance in September was $4,000 unfavorable. What is the purchase-price variance for material X15 in September? Multiple Choice $2,000 favorable. $1,800 favorable. $1,600 favorable. $1,300 favorable. $1,400 favorable.
Required information Skip to question [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) $ 20.00 Direct labor (1.8 hours @ $12.00 per hour) 21.60 Overhead (1.8 hours @ $18.50 per hour) 33.30 Standard cost per unit $ 74.90 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation—Building 23,000 Depreciation—Machinery 71,000 Taxes and insurance 18,000 Supervisory salaries 252,500 Total fixed overhead costs 364,500…
15. Portland Inc. (PI) has developed standard costs for direct materials and direct labor. For the current year PI estimated the following costs for one of their major products, the PI22: Standard Quantity Standard Price Direct Materials 0.25 pounds per unit $25 per pound Direct Labor 0.70 hours per unit $15 per hour Units 30,000 PI's actual results for the year were production and sales of 33,500 units using 8,100 pounds of direct materials for a total material cost of $216,675 and direct manufacturing labor cost was $13 per hour for a total direct labor cost of $341,250. a. Calculate a full analysis of the direct materials price, efficiency, and flexible budget variances. b. Calculate a full analysis of the direct labor price, efficiency, and flexible budget variances. c. Comment on possible causes of the direct labor price and efficiency variances. Focus on causes of the variance NOT repeating financial results from your analysis above.
Question ABC Company has established standard costs for the furniture department, in which one (1) size of the cabinet is made. The standard costs of producing one (1) of these cabinets are shown below: Direct material (Lumber)50 board feet at P4.00 per foot P200.00Labor standard8 hours at P10.00 per hour 80.00Variable overhead8 hours at P5.00 per hour 40.00Fixed overhead8 hours at P3.00 per hour 24.00Total P344.00 During January 201A, 500 cabinets were produced. The actual cost of operations during the month are shown below: Direct materials purchased (30,000 board feet at P4.10 per board foot)P123,000Direct materials used (24,000 board feet)Direct labor (4,200 hours at P9.50 per hour) 39,900Total variable overhead cost 22,000Total fixed overhead cost 11,000 The budgeted overhead for the furniture department based on a normal monthly activity of 4,500 hours is P36,000, of which P22,500 is variable and P13,500 is fixed overhead. Requirements 1. Material purchase price variance…
GenoPearls company manufactures product X. The company uses a standard costing of accounting system. In July 2012, 12,000 products were made. The following standard cost data applied to the month of July.· Cost Element, Standard (per unit)· Direct materials, 5 meters at P 7 per meter· Direct Labor, 1 hour at P 12 per hr· Overhead, 1 hour at P 9 per hr (fixed P 6; variable is P 3) The actual cost data are as follows: · Direct materials, P423,400 for 58,000 meters (7.30 per meter)· Direct Labor, P128,800 for 11,500 hours (P 11.20 per hour)· Overhead, P90,000 fixed overhead and P 42,000 variable overheadOverhead is applied on the basis of direct labor hours per GenoPearls Corporation. At normal capacity, budgeted fixed overhead costs were P 90,000 and a budgeted variable overhead cost is P 45,000. Compute the volume variance (Write F if favorable or UF if unfavorable to your final answer without space: Example: P12,000UF)

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