Hedmond Corp manufactures unique residential backyard sheds. The company has budgeted the production of 200 home...
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Hedmond Corp manufactures unique residential backyard sheds. The company has budgeted the production of 200 home sheds in the period (one month). Standard prices for materials (pine wood) and labour are as follows: $30 per metre for pine wood and $25 per hour for direct labour. Each shed was expected to use 40 hours of direct labour and 20 metres of pine wood. During August, Hedmond Corp built 160 sheds, using total 3,000 metres of pine wood and 7,000 direct labour hours. The actual costs incurred for all the pine wood used and labour incurred in August are as follows: $63,000 for pine wood and $161,000 in total for direct labour. Required: Compute: 1. The standard cost of completing one shed. (Assume every unit built is identical.) 2. The direct materials price variance; Be sure to label each variance as being either favorable (F) or unfavorable (U). 3. The direct materials quantity/efficiency variance; 4. The direct labour price variance; 5. The direct labour efficiency variance. 6. After having seen the calculations of the variances, the company's manager is excited by the results. But the manager was confused because members of the sales team were getting customer complaints. Comment briefly. Should the manager be excited? Explain very briefly. Use point form. Do not worry about grammar. Hedmond Corp manufactures unique residential backyard sheds. The company has budgeted the production of 200 home sheds in the period (one month). Standard prices for materials (pine wood) and labour are as follows: $30 per metre for pine wood and $25 per hour for direct labour. Each shed was expected to use 40 hours of direct labour and 20 metres of pine wood. During August, Hedmond Corp built 160 sheds, using total 3,000 metres of pine wood and 7,000 direct labour hours. The actual costs incurred for all the pine wood used and labour incurred in August are as follows: $63,000 for pine wood and $161,000 in total for direct labour. Required: Compute: 1. The standard cost of completing one shed. (Assume every unit built is identical.) 2. The direct materials price variance; Be sure to label each variance as being either favorable (F) or unfavorable (U). 3. The direct materials quantity/efficiency variance; 4. The direct labour price variance; 5. The direct labour efficiency variance. 6. After having seen the calculations of the variances, the company's manager is excited by the results. But the manager was confused because members of the sales team were getting customer complaints. Comment briefly. Should the manager be excited? Explain very briefly. Use point form. Do not worry about grammar.
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1 The standard cost of completing one shed Direct materials pine wood 20 meters 30 per meter 600 Dir... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
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