What was the adverse labour efficiency planning variance for July?$86,400$77,760$93,960$97,200Close All P Fla Mugg Co makes hand painted mugs exclusively for an expensive chain of retailstores. The mugs are made and painted in batches. Standards are set at thebeginning of each year and in January, the standard time and labour cost per batchof mugs were set at:Time per batch6.7 hours$24Labour cost per hour (set by head office)JuneIn June, the labour force had to learn how to paint a more complicated design due toa request from the retail chain. The first batch of mugs with the new design wasexpected to take 14.1 hours and an 85% learning curve was expected to apply forthe first eight batches, after which the learning effect would end. Each batch after theeighth batch was expected to take 8.5 hours. The budgeted production for June was1,000 batches.JulyIn July, the standard time per batch was revised to 8.5 hours and productioninformation was as follows:Budgeted production1,700 batchesActual production1,800 batchesActual labour time15,660 hoursActual labour cost$30 per hourAugustThe labour variances for August were as follows:Planning variance($)Operational variance($)Labour rate2,880 Adverse0Labour efficiency024,000 Favourable

Variance analysis and standard costing are the tools that managers use for determining performance…

Answered: What was the adverse labour efficiency…

Business

Accounting

What was the adverse labour efficiency planning variance for July? $86,400 © $77,760 $93,960 $97,200

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 2EB: Salley is developing material and labor standards for her company. She finds that it costs $0.55 per...

See similar textbooks

Similar questions

1. XYZ Company is a multinational company which exports ladies dresses to European countries. For the month of January, the total ordered quantity amounts to 14,400 pieces and lead time of 5 days is given to the company to finish the goods. Based on the time study conducted by the Senior Industrial Engineer, the standard time for this particular style of ladies dress is 5.0 mins/piece. Being an Industrial Engineer of the same plant, you were given the task to provide your superior of the following information given the additional data below: Salary per person = 400.00/day Working time = 7.5 hours/day Material Cost = 10,000.00 Miscellaneous Cost = 5,000.00 REQUIRED: Compute for the Production Cost 2. GIVEN: WARRANTY COST = P 30,000.00 DEVELOPMENT COST = 40,000.00 PRODUCTION COST = 60,000.00 COMPUTE FOR TOTAL COST
Note: You must complete part A before completing parts B and C. Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows: DIRECT MATERIALS CostBehavior Unitsper Case Costper Unit Direct MaterialsCost per Case Cream base Variable 100 ozs. $0.02 $2.00 Natural oils Variable 30 ozs. 0.30 9.00 Bottle (8-oz.) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department CostBehavior Timeper Case Labor Rateper Hour Direct LaborCost per Case Mixing Variable 20 min. $18.00 $6.00 Filling Variable 5 14.40 1.20 25 min. $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed $600 Facility…
Dawson Toys Ltd produces a toy called the Maze. The company has recently established 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 £0.50 per micron Direct labour: 1.0 hours per toy at £6 per hour During July, the company produced 2,000 Maze toys. Production data for the month on the toy follow: Direct materials: 16,400 microns were purchased for use in production at a cost of £0.42 per micron. Some 4,000 of these microns were still in inventory at the end of the month. Direct labour: 3,200 direct labour-hours were worked at the cost of £24,640. Required: 1. Compute the following variances for July: (a) Compute direct materials price variance Compute direct materials quantity variance (b) Compute direct labour rate variance.…
Comfy Limited manufactures glass ornaments and housewares. The business makes use of unskilled labour and provides training to do hand crafting of the goods. In January, they decided to add a fruit bowl to the range. It took 45.60 hours to complete the first two fruit bowls. It was found that labour hours reduced as cumulative output increased, and it is expected that this trend will continue until 64 fruit bowls have been manufactured. The total number of hours to complete the next two fruit bowls was 41.04 hours. The labour and material costs to manufacture the first four fruit bowls, which have already been sold, were as follows: Direct materials: R1 360 Direct labour: R1 420Additional information: A gift shop owner saw these fruit bowls and has asked for a quotation for 12 to add to its range of products. Since the first four fruit bowls were manufactured, the price of material increased by 8%, and the cost of labour by 15%. Comfy Limited paid the designer of the fruit bowl R1…
Erle Company manufactures a moble fitness device called the JoggIng Mate. The company uses standards to control Its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Rate Standard per Hour $6.00 Standard Hours Cost 27 minutes $2.70 During August, 9,690 hours of direct labor time were needed to make 20,000 units of the Jogging Mate. The direct labor cost totaled $56,202 for the month. Requlred: 1. What Is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 20,000 Jogging Mates? 3. What Is the labor spending varlance? 4. What is the labor rate varlance and the labor efficiency varlance? 5. The budgeted varlable manufacturing overhead rate is $4.10 per direct labor-hour. During August, the company Incurred $48,450 in varlable manufacturing overhead cost. Compute the varlable overhead rate and efficiency varlances for the month. (For requlrements 3 through 5, Indicate the…
Picture It Inc. manufactures customized wooden frames. The direct materials needed to construct the frames are wood, glass, and cardboard. Picture It has 22 employees who work for 40 hours in a work week and are each paid $17 per hour. The company produced and sold 900 frames in the month of September. During the month of September the following purchases were made to produce the 900 frames: Wood-4000 ft. at $1.20/ft. Glass-400 pieces at $5.60/piece Cardboard-500 pieces at $0.50/piece Required: 1. Calculate the total product cost for the month. Assume that all employees worked for 4 weeks in September and that the company incurred $55,000 as manufacturing overhead costs. 2. Calculate the per-unit cost. Round your answer to two decimal places. 3. Calculate the gross margin for the month of September assuming that the company sells each frame for $250.
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard costsystem to help control costs and has established the following standards for the Maze toy:Direct materials: 6 microns per toy at $0.50 per micronDirect labor: 1.3 hours per toy at $8 per hourDuring July, the company produced 3,000 Maze toys. Production data for the month on the toy follow:Direct materials: 25,000 microns were purchased at a cost of $0.48 per micron. 5,000 of these micronswere still in inventory at the end of the month.Direct labor: 4,000 direct labor-hours were worked at a cost of $36,000.Required:1. Compute the following variances for July:a. Direct materials price and quantity variances.b. Direct labor rate and efficiency variances.2. Prepare a brief explanation of the possible causes of each variance
The Calhoun Textile Mill is in the process of deciding on a production schedule. It wishes to know how to weave the various fabrics it will produce during the coming quarter. The sales department has continued orders for each of the 15 fabrics produced by Calhoun. These demands are given in the following table. Also given in this table is the variable cost for each fabric. The mill operates continuously during the quarter: 13 weeks, 7 days a week, and 24 hours a day. There are two types of looms: dobbie and regular. Dobbie looms can be used to make all fabrics and are the only looms that can weave certain fabrics, such as plaids. The rate of production for each fabric on each type of loom is also given in the table. Note that if the production rate is zero, the fabric cannot be woven on that type of loom. Also, if a fabric can be woven on each type of loom, then the production rates are equal. Calhoun has 90 regular looms and 15 dobbie looms. For this problem, assume that the time requirement to change over a loom from one fabric to another is negligible. Management would like to know how to allocate the looms to the fabrics and which fabrics to buy on the market so as to minimize the cost of meeting demand.
Salley is developing material and labor standards for her company. She finds that it costs $0.55 per pound of material per widget. Each widget requires 6 pounds of material per widget. Salley is also working with the operations manager to determine what the standard labor cost is for a widget. Upon observation, Salley notes that it takes 3 hours in the assembly department and 1 hour in the finishing department to complete one widget. All employees are paid $10.50 per hour. A. What is the standard materials cost per unit for a widget? 8. What is the standard labor cost per unit for a widget?
Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Ingles, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 16 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next months sales are in the finished goods inventory. Ingles also purchases sufficient materials to ensure that materials inventory is 60 percent of the following months scheduled production. Ingless sales budget in units for the next quarter is as follows: Ingless ending inventories in units for July 31 are as follows: Required: 1. Calculate the number of tables to be produced during August. 2. Disregarding your response to Requirement 1, assume the required production units for August and September are 2,100 and 1,900, respectively, and the July 31 materials inventory is 4,000 units. Compute the number of table legs to be purchased in August. 3. Assume that Ingles Corporation will produce 2,340 units in September. How many employees will be required for the Assembly Department in September? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40-hour week and a 4-week month.) (CMA adapted)
Affordable Electronics Inc. manufactures medium-quality, reasonably priced wireless speakers for home use. The company uses standards to control its costs. The labour standards that have been set for one speaker are as follows: Standard Rate Standard per Hour $19.00 Standard Hours Cost 12 minutes (0.20 hours) $3.80 During July, 3,850 hours of direct labour time were recorded to make 18,000 units. The direct labour cost totalled $74,305 for the month.
Sifton Electronics Corporation manufactures and assembles electronic motor drives for video cameras. The company assemble. the motor drives for several accounts. The process consists of a lean cell for each customer. The following information relates t only one customer's lean cell for the coming year. For the year, projected labor and overhead was $3,120,000 and materials costs were $31 per unit. Planned production included 5,120 hours to produce 16,000 motor drives. Actual production for August was 1,870 units, and motor drives shipped amounted to 1,480 units. Conversion costs are applied based on units of production From the foregoing information, determine the cell conversion cost rate. a. $2,108.11 b. $195.00 c. $1,668.45 d. $609.38