Score: 0.78 of 5 pts 3 of 3 (1 complete) Score: 8.68%, 078 of 9 pts 0%P844 (simi
ID: 2555378 • Letter: S
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Score: 0.78 of 5 pts 3 of 3 (1 complete) Score: 8.68%, 078 of 9 pts 0%P844 (similar to) Question Help O Burke Manutacturing Company's conting system has two direct-cost calegories: direct materials and diredt manufacturing labor Manufacturing overhead (both variable and fxed) is allocated to products on the basis of standand direct manufacturing laoor hours (OLH) A the beginning of 201T, Burke adopted the folowing standards for s manufacturing coss Requirement 1. Prepare a schedule of total standand manulacturing coss for the 8,400 output units in January 2017 Direct materials Dinect manufacturing lab Manufacturing overhead ?68,000 ReauirementM 2. For the month of Januarv 2017 comoute the Enter any number in the edit feids and then olick Check Answer varlances indicatina whether each is favorable F or unlavorable Clear All G Search or type URL 6 8 9 0 0Explanation / Answer
1. Schedule of Total Standard Manufacturing Cost
Fixed manufacturing overhead, lump-sum : $296,000
= Fixed manufacturing overhead rate x Budgeted fixed manufacturing overheadDenominator level
= $8 x 37,000 = $296,000
2. Variances for the month of January, 2017
a. Direct materials price variance, based on purchases = AQ x (SP - AP)
=36,000 x ($5 - $5.30) = -$10,800 (U)
b. Direct materials efficiency variance = (AQ - SQ) x SP
Standard Quantity = 8400 units x 4 lbs. = 33,600
=(34,000 - 33,600) x $5 = $2000 (U)
c. Direct manufacturing labor price variance = AH x (SR - AR)
= 41,000 hrs. x ($18 - $17.60) = $16,400 (F)
d. Direct manufacturing labor efficiency variance = SR x (SH - AH)
Standard Hhours for actual production = 8400 units x 5 hr. = 42,000
Labor efficiency variance = $18 x (42,000 - 41,000) = $18,000 (F)
e. Total manufacturing overhead spending variance :
= Actual factory overhead - Budgeted allowance based on actual hours worked
= $725,000 - [(41,000 x $6) + $296,000] = $183,000 (U)
f. Variable manufacturing overhead efficiency variance = ( SH ? AH ) × SR
= (42,000 hrs - 41,000 hrs) x $6 = $6,000 (F)
g. Production-volume variance = (Denominator level hours - Production volume hours) x SR
=(37,000 - 42,000) x $8 = -$40,000 (F)
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Direct Material (8400 units x $20) $168,000 Direct Manufacturing Labor (8400 units x $90) $756,000 Manufacturing Overhead : Variable (8400 units x $30) $252,000 Fixed (8400 units x $40) $336,000 Total $1,512,000Related Questions
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