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Chapter 23, Problem 3BPSB
Problem 23-3B
Flexible budget preparation; computation of materials, labor, and overhead variance, and overhead variance report
P1P2P3
Suncoast Company set the following standard costs for one unit of its product.
Direct materials (6 lbs. @ $5 per lb.) …………………. $ 27
Direct labor (2 hrs. @ $17 per hr.) ……………………... 18
Overhead (2 hrs. @ $ 18.50 per hr.) ……………………. 24
Total
The predetermined overhead rate ($ 16.00 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level.
Overhead Budget (75% Capacity)
Variable overhead costs
Indirect materials ……………………………………… $ 22,000
Indirect labor …………………………………………… 90,000
Power …………………………………………………… 22,500
Repairs and maintenance ……………………………….. 45,000
Total variable overhead costs …………………………… $180,000
Fixed overhead costs
Depreciation- Machinery ………………………………… 72,000
Taxes and insurance ……………………………………… 18,000
Supervision ………………………………………………... 66,000
Total fixed overhead costs …………………………………180,000
Total overhead costs ………………………………………………$ 360,000
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (91,000 lbs. @ $5.10 per lb) …………………… $ 420,900
Direct labor (30,500 hrs. @ $ 17.25 per hr.) ……………………… 280,440
Overhead costs
Indirect materials …………………………………………. $ 21,600
Indirect labor ………………………………………………. 82,260
Power ………………………………………………………. 23,100
Repairs and maintenance …………………………………… 46,800
Depreciation-Building ……………………………………… 24,000
Depreciation-Machinery …………………………………….. 75,000
Taxes and insurance …………………………………………. 16,500
Supervision …………………………………………………… 66,000
355,260
Total costs ……………………………………………………………_____
$1,056,600 _______
Required
- Examine the monthly overhead budget to (a) determine the costs per unit for each variable overhead item and its total per unit costs and (b) identity the total fixed costs per month.
- Prepare flexible overhead budgets (as in Exhibit 23.12) for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.
- Compute the direct materials cost variance, including its price and quantity variances.
- Compute the direct labor cost variance, including its rate and efficiency variances.
- Prepare a detailed overhead variance report (as in Exhibit 23.16) that shows the variances for individual items of overhead.
EXHIBIT 23.12 Flexible Overhead Budgets
EXHIBIT 23.16 Overhead Variance Report
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Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4
Skip to question
[The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product.
Direct materials (6 Ibs. @ $5 per Ib.)
$
30
Direct labor (2 hrs. @ $17 per hr.)
34
Overhead (2 hrs. @ $18.50 per hr.)
37
Total standard cost
$
101
The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level.
Overhead Budget (75% Capacity)
Variable overhead costs
Indirect materials
$
45,000
Indirect labor
180,000
Power
45,000
Repairs and maintenance
90,000
Total variable overhead costs
$
360,000
Fixed…
Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4
Skip to question
[The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product.
Direct materials (6 Ibs. @ $5 per Ib.)
$
30
Direct labor (2 hrs. @ $17 per hr.)
34
Overhead (2 hrs. @ $18.50 per hr.)
37
Total standard cost
$
101
The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level.
Overhead Budget (75% Capacity)
Variable overhead costs
Indirect materials
$
45,000
Indirect labor
180,000
Power
45,000
Repairs and maintenance
90,000
Total variable overhead costs
$
360,000
Fixed…
Exercise 21-7 (Algo) Standard cost per unit, total budgeted cost, and total cost variance LO P2
A manufactured product has the following information for August.
Direct materials
Direct labor
Overhead
Units manufactured
Total manufacturing costs
Standard Quantity and Cost
2 pounds per unit @ $4.00 per pound
0.5 hour per unit @ $28 per DLH
$30 per DLH
Actual Results
12,600 units
$ 460,400
(1) Prepare the standard cost card showing standard cost per unit.
(2) Compute total budgeted cost for production in August.
(3) Compute the total cost variance for August.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Prepare the standard cost card showing standard cost per unit. (Round your final answers to 2 decimal places.)
Inputs
Direct materials
Standard quantity or hours
pounds
x
Standard price or
rate
Standard
cost per unit
Direct labor
Overhead
DLH
×
DLH
×
Chapter 23 Solutions
FUND.ACCT.PRIN -ONLINE ONLY >I<
Ch. 23 - Prob. 1DQCh. 23 - Prob. 2DQCh. 23 - Prob. 3DQCh. 23 - Prob. 4DQCh. 23 - Prob. 5DQCh. 23 - Prob. 6DQCh. 23 - Prob. 7DQCh. 23 - Prob. 8DQCh. 23 - Prob. 9DQCh. 23 - Prob. 10DQ
Ch. 23 - Prob. 11DQCh. 23 - Prob. 12DQCh. 23 - Prob. 13DQCh. 23 - How can the manager of advertising sales at Google...Ch. 23 - Prob. 15DQCh. 23 - Prob. 16DQCh. 23 - Prob. 1QSCh. 23 - Prob. 2QSCh. 23 - Prob. 3QSCh. 23 - Prob. 4QSCh. 23 - Prob. 5QSCh. 23 - Prob. 6QSCh. 23 - Prob. 7QSCh. 23 - Prob. 8QSCh. 23 - Prob. 9QSCh. 23 - Prob. 10QSCh. 23 - Prob. 11QSCh. 23 - QS 23-12
Labor cost variances P2
Frontera...Ch. 23 - Prob. 13QSCh. 23 - Prob. 14QSCh. 23 - Volume variance P3 Refer to information in QS...Ch. 23 - Prob. 16QSCh. 23 - Preparing overhead entries P5 Refer to the...Ch. 23 - Prob. 18QSCh. 23 - Prob. 19QSCh. 23 - Prob. 20QSCh. 23 - Prob. 21QSCh. 23 - Prob. 1ECh. 23 - Prob. 2ECh. 23 - Prob. 3ECh. 23 - Exercise 23-4 Preparing a flexible budget...Ch. 23 - Prob. 5ECh. 23 - Prob. 6ECh. 23 - Exercise 23-7
Cost variances
C2
Presented below...Ch. 23 - Prob. 8ECh. 23 - Prob. 9ECh. 23 - Prob. 10ECh. 23 - Prob. 11ECh. 23 - Prob. 12ECh. 23 - Prob. 13ECh. 23 - Prob. 14ECh. 23 - Prob. 15ECh. 23 - Prob. 16ECh. 23 - Prob. 17ECh. 23 - Prob. 18ECh. 23 - Prob. 19ECh. 23 - Prob. 20ECh. 23 - Prob. 21ECh. 23 - Prob. 22ECh. 23 - Prob. 23ECh. 23 - Prob. 1APSACh. 23 - Prob. 2APSACh. 23 - Prob. 3APSACh. 23 - Prob. 4APSACh. 23 - Prob. 5APSACh. 23 - Prob. 6APSACh. 23 - Prob. 1BPSBCh. 23 - Prob. 2BPSBCh. 23 - Problem 23-3B Flexible budget preparation;...Ch. 23 - Prob. 4BPSBCh. 23 - Prob. 5BPSBCh. 23 - Prob. 6BPSBCh. 23 - Prob. 23SPCh. 23 - Analysis of flexible budgets and standard costs...Ch. 23 - Prob. 2BTNCh. 23 - Selling materials, labor, and overhead standards...Ch. 23 - Prob. 4BTNCh. 23 - Prob. 5BTNCh. 23 - Prob. 6BTNCh. 23 - Prob. 7BTNCh. 23 - Prob. 8BTNCh. 23 - Prob. 9BTN
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