21,22,23 and 24), 8:00 PM-10.00 PM Short Problem Beck Company set the following

Question

21,22,23 and 24), 8:00 PM-10.00 PM Short Problem Beck Company set the following standard unit costs for its single product. Direct materials (28 Ibs.@$3 per Ib.) Direct labor (6 hrs.@$6 per hr.) Factory overhead-Variable (6 hrs.@ $4 per hr.) Factory overhead Fixod (6 hrs.@ $5 per hr.) Total standard cost S 84.00 36.00 24.00 30.00 174.00 The predetermined overhead rate is based on a planned operating volume of 60% of the productive capacity of S0,000 units per quarter. The following flexible budget information is available. Operating Levels 60% 50% 70% 25,000 30,000 35,000 150,000 180,000 210,000 Production in units Standard direct labor hours Budgeted overhead 900,000 S 900,000 S 900,000 600,000$ 720,000 S 840,000 Fixed factory overhead Variable factory overhead During the current quarter, the company operated at 70% of capacity and produced 35,000 units of product; actual direct labor totaled 148,800 hours. Actual costs incurred during the current quarter follow: Direct materials (975,000 Ibs.@ $3.1) Direct labor (148,800 hrs.@ $5.75) Fixed factory overhead costs Variable factory overhead costs Total actual costs $ 3,022,500 855,600 1,319,547 1,235,321 $ 6,432,968 Required: On a separate sheet of paper, compute the following variances: (A) total direct materials variance; direct materials price variance; direct materials quantity variance (B) total direct labor variance; direct labor rate variance; direct labor efficiency variance (C) total overhead variance; overhead controllable variance; overhead volume variance

Explanation / Answer

A.     Total Direct material Variance (AQ*AP)-(SQ for actual prodn.*SP) (975000*3.1)-((35000*28)-3) ie. 3022500-2940000= 82500 UF Direct material Price Variance= (AP-SP)*AQ (3.1-3)*975000= 97500 UF Direct material Quantity Variance= (AQ-SQ for actual prodn.)*SP (975000-(28*35000))*3 -15000 F Verification DMPV+DMQV=TDMV 97500 UF + 15000 F= 82500 UF B.   Total Direct Labor Variance (AH*AR)-(Shrs.for actual prodn.*SR) (148800*5.75)-((35000*6)*6) ie. 855600-1260000= -404400 F Direct Labor Rate Variance= (AR-SR)*Ahrs. (5.75-6)*148800= -37200 F Direct Labor Efficiency Variance= (Ahrs.-Shrs. for actual prodn.)*SR (148800-(6*35000))*6 -367200 F Verification DLRV+DLEV=TDLV 37200 F+367200 F=404400 F C.    Actual factory overhead (1319547+1235321) $2,554,868 Based on standard hours allowed:    Fixed OH budgeted $900,000    Variable OH (35000*6*4) 840,000 $1,740,000 OH Controllable variance UF $814,868 Budgeted OH based on Std. hrs. allowed    Fixed OH budgeted $900,000    Variable OH (35000*6*4) 840,000 $1,740,000 OH charged to production (35000*6*(4+5)) $1,890,000 OH Volume variance F ($150,000)

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.