N Netflix ,\') 201810-Spring 2018-ACCT-21 × y D chapter 10HW CSolved: Island Nov
ID: 2559348 • Letter: N
Question
N Netflix ,') 201810-Spring 2018-ACCT-21 × y D chapter 10HW CSolved: Island Novelties, Inc., Ashley x X ? 0 ezto.mheducation.com/hm.tpx Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May Standard Cost per Unit Actual Cost per Unit Direct materials: $3.60 Standard: 1.80 feet at $2.00 per foot Actual: 1.75 feet at $2.20 per foot S 3.85 Direct labor: Standard: 0.90 hours at $16.00 per hour Actual: 0.95 hours at $15.40 per hour 14.40 14.63 Variable overhead: 3.60 Standard: 0.90 hours at $4.00 per hour Actual: 0.95 hours at $3.60 per hour 3.42 S21.90 $0.30 Total cost per unit $21.60 Excess of actual cost over standard cost per unit The production superintendent was pleased when he saw this report and commented: This S0.30 excess cost is well within the 2 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product. Actual production for the month was 11,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Compute the following variances for May: a. Materials price and quantity variances. (Input all amounts as positive values. Indicate the effect of cach variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Materials price variance Materials quantity varianceExplanation / Answer
SOLUTION
Materials Price Variance = Actual Quantity * (Actual price - Standard price)
= (11,000*1.75 feet) * ($2.20 - $2.00)
= 19,250 * $ 0.20
= $3,850 (U)
Materials quantity variance = Standard Price *(Actual quantity - Standard quantity)
= $2.00 * [19,250 - (11,000 * 1.80 feet)]
= $2.00 * (19,250 - 19,800)
= $2.00 * 550
= $1,100 (F)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.