At the end of the month, you find that the labor and materials spent on manufacturing collars was different from what you estimated: The collar maker had to work nine hours a day instead of eight due to an increased demand for collars.Because of the increased demand, the hourly rate you paid your employee for making the collars increased to $16.50.An increase in the cost of raw material led the direct material cost per collar to increase to $10.However, you also made and sold 60 more collars than you expected to sell in the month. You now need to determine the variance in the materials and labor cost from what you estimated in Milestone Two based on the market research data.

Variances are calculated by comparing the standard set with the actual performance of the company.

Answered: t the end of the month, you find that…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 2PB: Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500...

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At the end of the month, you find that the labor and materials spent on manufacturing collars was different from what you estimated:

The collar maker had to work nine hours a day instead of eight due to an increased demand for collars.
Because of the increased demand, the hourly rate you paid your employee for making the collars increased to $16.50.
An increase in the cost of raw material led the direct material cost per collar to increase to $10.
However, you also made and sold 60 more collars than you expected to sell in the month.

You now need to determine the variance in the materials and labor cost from what you estimated in Milestone Two based on the market research data.

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