Budget Variances, Materials and Labor 1 Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards for materials and labor: Leather (3 strips @ $6) Direct labor (0.75 hr. @ $16) Total prime cost $18.00 12.00 $30.00 During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 287,500 strips at $5.40 per strip. There was no beginning or ending inventories of leather. Actual direct labor was 78,200 hours at $16.50 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 92,000 leather belts. Cost of materials Cost of direct labor 2. Compute the total budget variances for materials and labor. Total Budget Variance Materials Labor 3. Conceptual Connection: Would you consider these variances material with a need for investigation? 4. Refer to Exhibit 2.2 for a description of data analytic types. What data analytic type is used in Requirements 1, 2, and 3? The data analytic type for Requirement 1 is The data analytic type that best fits Requirements 2 and 3 is

Budget Variances, Materials and Labor 1 Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards for materials and labor: Leather (3 strips @ $6) Direct labor (0.75 hr. @ $16) Total prime cost $18.00 12.00 $30.00 During the first month of the year, the Boise plant produced 92,000 belts. Actual leather purchased was 287,500 strips at $5.40 per strip. There was no beginning or ending inventories of leather. Actual direct labor was 78,200 hours at $16.50 per hour. Required: 1. Compute the costs of leather and direct labor that should be incurred for the production of 92,000 leather belts. Cost of materials Cost of direct labor 2. Compute the total budget variances for materials and labor. Total Budget Variance Materials Labor 3. Conceptual Connection: Would you consider these variances material with a need for investigation? 4. Refer to Exhibit 2.2 for a description of data analytic types. What data analytic type is used in Requirements 1, 2, and 3? The data analytic type for Requirement 1 is The data analytic type that best fits Requirements 2 and 3 is

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 14P: Fargo Co. manufactures products in batches of 100 units per batch. The company uses a standard cost...

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Use the following information to complete Brief Exercises 10-25 and 10-26: Tico Inc. produces plastic bottles. Each bottle has a standard labor requirement of 0.03 hour. During the month of April, 900,000 bottles were produced using 25,200 labor hours @ 15.00. The standard wage rate is 13.50 per hour. 10-26 Labor Rate and Efficiency Variances Refer to the information above for Tico Inc. on the previous page Required: Calculate the labor rate and efficiency variances using the columnar and formula approaches.
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