Dawson Toys, Limted, produces a toy called the Maze. The company has recently created a standard cost system to help control costsand has established the following standards for the Maze toy:Direct materials. 6 microns per toy at $0.34 per micronDirect labor. 13 hours per toy at $6.50 per hourDuring July, the company produced 4,700 Maze toys. The toy's production data for the month are as follows:Direct materials 72,000 microns were purchased at a cost of $0.32 per micron. 36,750 of these microns were still in inventory at theend of the month.Direct labor. 6,610 direct labor-hours were worked at a cost of $46,270.Required:1. Compute the following varlances for July: (Indicate the effect of each varlence by seiecting "F" for favorable, "U" for unfavorable,and "None" for no effect (1.e., zero verlance). Input all amounts as positive values. Do not round Intermediate calculations. Roundfinal answer to the nearest whole doller amount.)a. The meterals price and quantity varlances.b. The lobor rate and efficiency varlances

Name: Dawson Toys, Limted, produces a toy called the Maze. The company has
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Description: Dawson Toys, Limted, produces a toy called the Maze. The company has recently created a standard cost system to help control costsand has established the following standards for the Maze toy:Direct materials. 6 microns per toy at $0.34 per micronDir

Variance analysis is a method of determining the disparity between expected and actual statistics.…

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Dawson Toys, Limted, produces a toy called the Maze. The company has recently created a standard cost system to help and has established the following standards for the Maze toy Direct materials: 6 microns per toy at $0.34 per micron Direct labor. 13 hours per toy at $6.50 per hour During July, the company produced 4700 Maze toys. The toy's production data for the month are as follows: Direct materials. 72,000 microns were purchased at a cost of $0.32 per micron. 36,750 of these microns were still in imentory at the end of the month. Direct labor. 6,610 direct labor-hours were worked at a cost of $46.270. Required: I Compute the following varlances for July: (Indicate the effect of each varlence by selecting "F' for favorable, "U" for untavorable, and "None" for no effect (1.e., zero verlence). Input all emounts as positive values. Do not round Intermediate calclations. Round Inal answer to the neerest whole doller amount.) The metenais price and quantity varlances Iahor rate and efficiency varlances

Dawson Toys, Limted, produces a toy called the Maze. The company has recently created a standard cost system to help and has established the following standards for the Maze toy Direct materials: 6 microns per toy at $0.34 per micron Direct labor. 13 hours per toy at $6.50 per hour During July, the company produced 4700 Maze toys. The toy's production data for the month are as follows: Direct materials. 72,000 microns were purchased at a cost of $0.32 per micron. 36,750 of these microns were still in imentory at the end of the month. Direct labor. 6,610 direct labor-hours were worked at a cost of $46.270. Required: I Compute the following varlances for July: (Indicate the effect of each varlence by selecting "F' for favorable, "U" for untavorable, and "None" for no effect (1.e., zero verlence). Input all emounts as positive values. Do not round Intermediate calclations. Round Inal answer to the neerest whole doller amount.) The metenais price and quantity varlances Iahor rate and efficiency varlances

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 4PA: April Industries employs a standard costing system in the manufacturing of its sole product, a park...

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Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per product follow: Budgeted fixed overhead costs for the month are $4,000, and Shinto expected to manufacture 2,000 units. Actual production, however, was only 1,800 units. Materials prices were 10% over standard, and labor rates were 5% over standard. Of the factory overhead expense, only 80% was used, and fixed overhead was $100 over budget. The actual variable overhead cost was $4,800. In materials usage, 8% more parts were used than were allowed for actual production by the standard, and 6% more labor hours were used than were allowed. Required: Calculate the materials and labor variances. Calculate the variances for overhead by the four-variance method. (Hint: First compute the fixed and variable overhead rates per hour.)
Queen Industries uses a standard costing system in the manufacturing of its single product. It requires 2 hours of labor to produce 1 unit of final product. In February, Queen Industries produced 12,000 units. The standard cost for labor allowed for the output was $90,000, and there was an unfavorable direct labor time variance of $5,520. A. What was the standard cost per hour? B. How many actual hours were worked? C. If the workers were paid $3.90 per hour, what was the direct labor rate variance?
JoyT Company manufactures Maxi Dolls for sale in toy stores. In planning for this year, JoyT estimated variable factory overhead of 600,000 and fixed factory overhead of 400,000. JoyT uses a standard costing system, and factory overhead is allocated to units produced using standard direct labor hours. The level of activity budgeted for this year was 10,000 direct labor hours, and JoyT used 10,300 actual direct labor hours. Based on the output accomplished during this year, 9,900 standard direct labor hours should have been used. Actual variable factory overhead was 596,000, and actual fixed factory overhead was 410,000 for the year. Based on this information, the variable factory overhead controllable variance for JoyT for this year was: a. 24,000 unfavorable. b. 2,000 unfavorable. c. 4,000 favorable. d. 22,000 favorable.
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Cardiff Inc. manufactures men’s sport shirts for large stores. It produces a single quality shirt in lots of a dozen according to each customer’s order and attaches the store’s label. The standard costs for a dozen shirts include the following: During October, Cardiff worked on three orders for shirts. Job cost records for the month disclose the following: The following information is also available: Cardiff purchased 95,000 yards of materials during October at a cost of $53,200. The materials price variance is recorded when goods are purchased, and all inventories are carried at standard cost. Direct labor incurred amounted to $112,750 during October. According to payroll records, production employees were paid $10.25 per hour. Overhead is applied on the basis of direct labor hours. Factory overhead totaling $22,800 was incurred during October. A total of $288,000 was budgeted for overhead for the year, based on estimated production at the plant’s normal capacity of 48,000 dozen shirts per year. Overhead is 60% fixed and 40% variable at this level of production. There was no work in process at October 1. During October, Lots 30 and 31 were completed, and all materials were issued for Lot 32, which was 80% completed as to labor and overhead. Required: Prepare a schedule computing the October total standard cost of Lots 30, 31, and 32. Prepare a schedule computing the materials price variance for October and indicate whether it is favorable or unfavorable. For each lot produced during October, prepare schedules computing the following (indicate whether favorable or unfavorable): Materials quantity variance in yards. Labor efficiency variance in hours. (Hint: Don’t forget the percentage of completion.) Labor rate variance in dollars. Prepare a schedule computing the total flexible-budget and production-volume overhead variances for October and indicate whether they are favorable or unfavorable. Give some reasons as to why the production-volume variance may be unfavorable and why it is important to correct the situation.
Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
Cozy, Inc., manufactures small and large blankets. It estimates $950,000 in overhead during the manufacturing of 360,000 small blankets and 120,000 large blankets. What is the predetermined overhead rate if a small blanket takes 2 hours of direct labor and a large blanket takes 3 hours of direct labor?
Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.
Case made 24,500 units during June, using 32,000 direct labor hours. They expected to use 31,450 hours per the standard cost card. Their employees were paid $15.75 per hour for the month of June. The standard cost card uses $15.50 as the standard hourly rate. A. Compute the direct labor rate and time variances for the month of June, and also calculate the total direct labor variance. B. If the standard rate per hour was $16.00, what would change?