Concept explainers
a
Introduction: The standard costs refer to the estimated cost per unit. The standard cost plays a very important role because a comparison of standard costs and actual cost help in measuring the performance. The budgets and standard costs are an important part of management planning and controlling costs.
To calculate: The material price variance, material quantity variance, total material variance, direct labor price variance, direct labor quantity variance, and total direct labor variances.
b.
Introduction: The overhead variance is related to underspending and overspending and it normally includes that cost per indirect labor hour incurred is different than the budgeted. The total overheads variance requires actual manufacturing overheads and applied manufacturing overheads.
To calculate: The total overhead variance.
c.
Introduction: Under
To prepare: The income statement.
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ACCOUNTING PRCINCIPLES (CCCS CUSTOM)
- If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?arrow_forwardRulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?arrow_forwardEllerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?arrow_forward
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