Haley Inc. has established the following standard unit costs: Materials: 10 Ibs. @ $6 per Ib....
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Haley Inc. has established the following standard unit costs: Materials: 10 Ibs. @ $6 per Ib. $ 60.00 Labor: 3 hrs. @ $15 per hr. Factory overhead: 3 hrs. @ $3.50 per hr.. Total standard cost per unit 45.00 10.50 $115.50 The factory overhead budget includes the following data: Percent of capacity Direct labor hours 85% 76,500 $153,000 135.000 100% 90.000 $180,000 135.000 $315.000 Variable costs Fixed costs Total factory overhead cost Variable overhead rate per hour Fixed overhead rate per hour $288.000 $ 2.00 1.50 Total overhead rate per hour 3.50 Actual manufacturing costs incurred: Materials: 250,000 Ibs. @ $6.20 Labor: 77,400 hrs. @ $14.60 Factory overhead (including $135,000 fixed) Total actual cost for 25,500 units . $1,550,000 1,130,040 295.000 Standard cost of 25,500 units (standard time, 76,500 hrs.) Overall variance to be analyzed (unfavorable) $2,975,040 2.945.250 $ 29,790 Instructions: (1) Determine the price variance and quantity variance for the direct materials cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable. %24 (2) Determine the rate variance and time variance for the direct labor cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable. Direct Labor Cost Variances Rate variance: Time variance: Total direct labor cost variance: (3) Determine the controllable variance and the volume variance for the factory overhead cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable. In addition, provide an alternative analysis of factory overhead using a T account. Factory Overhead Cost Variances Variance Controllable variance: Actual variable factory overhead cost incurred . S Budgeted variable factory overhead for actual product produced Variance Volume variance: Budgeted hours at 100% of normal capacity hrs. Standard hours for amount produced hrs. Productive capacity not used hrs. Standard fixed factory overhead cost rate Variance Total factory overhead cost variance Haley Inc. has established the following standard unit costs: Materials: 10 Ibs. @ $6 per Ib. $ 60.00 Labor: 3 hrs. @ $15 per hr. Factory overhead: 3 hrs. @ $3.50 per hr.. Total standard cost per unit 45.00 10.50 $115.50 The factory overhead budget includes the following data: Percent of capacity Direct labor hours 85% 76,500 $153,000 135.000 100% 90.000 $180,000 135.000 $315.000 Variable costs Fixed costs Total factory overhead cost Variable overhead rate per hour Fixed overhead rate per hour $288.000 $ 2.00 1.50 Total overhead rate per hour 3.50 Actual manufacturing costs incurred: Materials: 250,000 Ibs. @ $6.20 Labor: 77,400 hrs. @ $14.60 Factory overhead (including $135,000 fixed) Total actual cost for 25,500 units . $1,550,000 1,130,040 295.000 Standard cost of 25,500 units (standard time, 76,500 hrs.) Overall variance to be analyzed (unfavorable) $2,975,040 2.945.250 $ 29,790 Instructions: (1) Determine the price variance and quantity variance for the direct materials cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable. %24 (2) Determine the rate variance and time variance for the direct labor cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable. Direct Labor Cost Variances Rate variance: Time variance: Total direct labor cost variance: (3) Determine the controllable variance and the volume variance for the factory overhead cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable. In addition, provide an alternative analysis of factory overhead using a T account. Factory Overhead Cost Variances Variance Controllable variance: Actual variable factory overhead cost incurred . S Budgeted variable factory overhead for actual product produced Variance Volume variance: Budgeted hours at 100% of normal capacity hrs. Standard hours for amount produced hrs. Productive capacity not used hrs. Standard fixed factory overhead cost rate Variance Total factory overhead cost variance
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Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Olds
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