Standard hours allowed for the year’s production. Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

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Answer 1

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Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 10A, Problem 10A.5E

1

To determine

Standard hours allowed for the year’s production.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

2

To determine

Amount of budgeted fixed overhead cost for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

3

To determine

Fixed overhead budget variance for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

4

To determine

Denominator activity level used in setting the predetermined overhead rate for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

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Standard Costing and Variance Analysis Standard Price or Rate P6.00 per meter Direct Materials Direct Labor Variable Factory Overhead P3.00 direct labor hour per Factory overhead is applied to production based on direct labor hours. During the month of February, 5,000 units were produced and sold to customers. Th following are the selected production data for the month: Materials Direct Variable used Labor FOH P52,500 Standard Cost allowed Actual cost incurred P84,000 P75,000 P6,000 U P21,000 P18,000 ? Materials Quantity variance Actual direct labor hours 7,500 hours Standard FOH rate per direct labor hour Standard Price per meter P3.00/hr. P6.00 /m. The difference between the standard and actual cost per unit produced is P0.15 favorable. Required: Compute the following: 1. The standard cost per unit of product. 2. The actual cost per unit of product. Standard Quantity per unit. 4. Material Price variance. 3. 5. 6. Labor Rate variance. Standard direct labor rate per hour. 7. Labor…

15. Reems Corporation uses a standard cost system. Direct labor information for Product E for the month of November is as follows: Standard labor price, P6.10 per hour Actual rate paid, P6.00 per hour Standard quantity allowed for actual production, 1,500 hours Labor efficiency variance, P600 unfavorable What is the actual hours worked? Group of answer choices 1,402 1,400 1,600 1,598

Using Fixed Overhead Variances The standard cost card for the single product manufactured by Cutter. Inc., is given below: Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 37,000 hours and manufactured 9,500 units of product. Selected data relating to the company’s fixed manufacturing overhead cost for the year are shown below: Required: 1. What were the standard hours allowed for the year’s production? 2. What was the amount of budgeted fixed overhead cost for the year? 3. What was the fixed overhead budget variance for the year? 4. What denominator activity level did the company use in setting the predetermined overhead rate for the year?

Answer 2

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 10A, Problem 10A.5E

1

To determine

Standard hours allowed for the year’s production.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

2

To determine

Amount of budgeted fixed overhead cost for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

3

To determine

Fixed overhead budget variance for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

4

To determine

Denominator activity level used in setting the predetermined overhead rate for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

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Answer 3

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 10A, Problem 10A.5E

1

To determine

Standard hours allowed for the year’s production.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

2

To determine

Amount of budgeted fixed overhead cost for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

3

To determine

Fixed overhead budget variance for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

4

To determine

Denominator activity level used in setting the predetermined overhead rate for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

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Answer 4

Question

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 10A, Problem 10A.5E

1

To determine

Standard hours allowed for the year’s production.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

2

To determine

Amount of budgeted fixed overhead cost for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

3

To determine

Fixed overhead budget variance for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

4

To determine

Denominator activity level used in setting the predetermined overhead rate for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

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Answer 5

Chapter 10A, Problem 10A.5E

1

To determine

Standard hours allowed for the year’s production.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

2

To determine

Amount of budgeted fixed overhead cost for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

3

To determine

Fixed overhead budget variance for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

4

To determine

Denominator activity level used in setting the predetermined overhead rate for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 6

Chapter 10A, Problem 10A.5E

1

To determine

Standard hours allowed for the year’s production.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 7

Chapter 10A, Problem 10A.5E

1

To determine

Standard hours allowed for the year’s production.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 8

2

To determine

Amount of budgeted fixed overhead cost for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 9

2

To determine

Amount of budgeted fixed overhead cost for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 10

3

To determine

Fixed overhead budget variance for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 11

3

To determine

Fixed overhead budget variance for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 12

4

To determine

Denominator activity level used in setting the predetermined overhead rate for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 13

4

To determine

Denominator activity level used in setting the predetermined overhead rate for the year.

Introduction: Standard cost is the cost that incur for direct labor, direct materials and for overhead. Standard costs are determined on current market situations and historical trends. In case of labor cost standard cost is determined by direct labor cost per hour and in case of direct material standard cost is determined by material cost per unit.

Answer 14

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Answer 16

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Answer 17

Ch. 10A - Fixed Overhead Variances LO10â€”4 Primara...Ch. 10A - Prob. 10A.2E Ch. 10A - Prob. 10A.3E Ch. 10A - Prob. 10A.4E Ch. 10A - Prob. 10A.5E Ch. 10A - Prob. 10A.6E Ch. 10A - Prob. 10A.7E Ch. 10A - Applying Overhead; Overhead Variances LO10â€”3,...Ch. 10A - Prob. 10A.9P Ch. 10A - Comprehensive Standard Cost Variances LO10â€”1,...

Solution Summary: The author explains the cost of direct labor, direct materials, and for overhead. Standard costs are determined on current market situations and historical trends.

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