Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Cost Per UnitDirect materials7.0ounces$ 3.00per ounce$ 21.00Direct labor0.3hours$ 14.00per hour$ 4.20Variable overhead0.3hours$ 9.00per hour$ 2.70 The company reported the following results concerning this product in June. Originally budgeted output2,400unitsActual output2,900unitsRaw materials used in production22,000ouncesPurchases of raw materials23,100ouncesActual direct labor-hours550hoursActual cost of raw materials purchases$ 45,000 Actual direct labor cost$ 12,400 Actual variable overhead cost$ 3,200 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor efficiency variance for June is:

Name: Tharaldson Corporation makes a product with the following standard cos
Uploaded: 2024-03-20T06:33:06.000Z
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Description: Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Cost Per UnitDirect materials7.0ounces$ 3.00per ounce$ 21.00Direct labor0.3hours$ 14.00per hour$ 4.20Variable overhead

Given, Actual labor hours = 550 Standard labor hours per unit = 0.3 hours Standard labor rate per…

Answered: Tharaldson Corporation makes a product…

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 8P: Carlo Lee Corp. has established the following standard cost per unit: Although 10,000 units were...

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Tharaldson Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	7.0	ounces	$ 3.00	per ounce	$ 21.00
Direct labor	0.3	hours	$ 14.00	per hour	$ 4.20
Variable overhead	0.3	hours	$ 9.00	per hour	$ 2.70

The company reported the following results concerning this product in June.

Originally budgeted output	2,400	units
Actual output	2,900	units
Raw materials used in production	22,000	ounces
Purchases of raw materials	23,100	ounces
Actual direct labor-hours	550	hours
Actual cost of raw materials purchases	$ 45,000
Actual direct labor cost	$ 12,400
Actual variable overhead cost	$ 3,200

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The labor efficiency variance for June is:

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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