a business manufacturing man-buns for depilous hipster wann to in the past as to

Question

a business manufacturing man-buns for depilous hipster wann to in the past as toupees). You produce these man-buns ing manufacturing standards (i.e, budgets): Direct materials ous hipster wannabes (these man-buns have been the following man-buns (MB) in batches of 100. Each MB has 2.5 locks of hair 2.0 Direct Labor Hours $10.00 per lock Direct labor Hour Indirect materials Other indirect manufacturing costs Normal output $325 per batclh $7,000 per month 10 batches per month Total capacity 12 batches per month direct material inventory of "locks of hair that During October 2017 you made 11 batches of MBs and spent/incurred the following Locks of hair 2,810 locks 2,150 DLH $27,538 in total $32,788 in total $3,600 in total $6,950 in total Direct labor Variable O/H (Indirect materials) Fixed O/H (Other indirect mfg costs) Prepare an analysis of actual production costs for October compared to Budget-adjusted-for output (Flex Budget). Identify the usage/efficiency, price/rate, spending, and volume variances as appropriate. Record journal entries to record the use of direct materials, direct labor, and variable &fixed; manufacturing overhead. (Post costs to WIP first, then transfer all of WIP to Finished Goods. Transfer all of Finished Goods to coos-remember there is no beginning or ending inventory for WIP or Finished Goods.) . Prepare the adjusting journal entry to close all of the variances to COGS. Ferd is responsible for buying your direct materials. Did he do a "good" job in October? Why? Franny is in charge of the use of the direct materials. Did she do a "good" job in October with regards to material usage? Why? Franny is also in charge of the use of direct labor. Did she do a "good" job in October with regards to labor usage/efficiency? Why? .Futz sets hourly wage rates for the direct labor. Did he do a "sood" job in October? Why? . You are in charge of all manufacturing overhead. Did you do a "good" job man aging overhead in October? Why?

Explanation / Answer

Analysis of Actual Production costs for October compared to Budget adjusted for output Amount in $ per MB Amount in $ per 100 MB= 1 Batch Revised as per actual output of 11 batch Actual cost for actual output of 11 batch Direct Materials 2.5 Locks of hair 10 per lock 25 2500 2750 Locks 27500 27538 Direct Labor 2.0 Direct Labor hours 16 per hour 32 3200 2200 hours 35200 32788 Indirect Materials $325 per batch 325 3575 3600 Other Indirect Manufacturing costs For normal 10 batches a month $7000 per month 6950 Material Usage Variance (Standard quntity of locks required-Actual quantityof locks)*standard rate =(2750-2810)*10 -600 Adverse Labor efficiency Variance =(Standard hours required-Actual Hour)*Standard rate per hour =(2200-2150)*16 800 Favourable Material Price Variance =Standard cost for 11 batches-Actual cost for 11 batches =27500-27538 -38 Adverse Labor rate variance =Standard cost for 11 batches-Actual cost for 11 batches =35200-32788 2412 Favourable Indirect Material spending variance =Standard cost for 11 batches-Actual cost for 11 batches =3575-3600 -25 Adverse Other Indirect cost manufacturing cost volume variance =Actual output*standard rate-Budgeted cost =11*700-7000 700 Favourable Note : Standard rate =budgeted cost/Normal output =7000/10 700 Other Indirect cost manufacturing cost Spending variance =Budgeted cost-Actual costs =7000-6950 50 Favourable Date/S. N. Accounts Title & Explanation Debit Credit Amount in $ Amount in $ 1 WIP Inventory 73275 Raw Material Inventory 27500 Direct Labor 35200 Indirect Material 3575 Other Indirect mfg cost 7000 2 Finished goods Inventory 73275 WIP Inventory 73275 3 Cost of goods sold 73275 Finished goods Inventory 73275 4 Material Usage Variance 600 Material Price variance 38 Indirect Material spending variance 25 Cost of goods sold 663 5 Cost of goods sold 3962 Labour efficiency Variance 800 Labour rate variance 2412 Other MFG cost volume variance 700 Other MFG cost Spending variance 50 Fred responsible for buying material Material price variance is adverse -38 He did not do a good job Franny is incharge of usage of material Material Usage variance is adverse -600 She also did not do a good job Franny did a good job with regard to usage/efficiency of direct labor Direct labor efficiency variance is favourable 800 Futs did exceptional job with regards to setting of hourly wage rate Direct labour rate variance is favourable 2412 I did a mixed Job for manufacuring overhead Indirect Material spending variance Adverse -25 Other MFG cost volume variance Favourable 700 Other MFG cost Spending variance favourable 50

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