Koontz Company manufactures a number of products. The standards relating to one of these products are...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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. Direct materials: Standard: 1.80 feet at $1.00 per foot Actual: 1.75 feet at $1.40 per foot Direct labor: Standard: 0.90 hours at $15.00 per hour Actual: 0.95 hours at $14.60 per hour Variable overhead: Standard: 0.90 hours at $6.00 per hour Actual: 0.95 hours at $5.60 per hour Total cost per unit Excess of actual cost over standard cost per unit Standard Cost per Unit $ 1.80 13.50 5.40 $ 20.70 $ 0.94 Actual Cost per Unit $ 2.45 13.87 5.32 $ 21.64 The production superintendent was pleased when he saw this report and commented: "This $0.94 excess cost is well within the 5 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 10,000 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 b. c. Materials price and quantity variances. Labor rate and efficiency variances. Variable overhead rate and efficiency variances. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. 2. 3. How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor time? a. Compute the following variances for May, materials price and quantity variances. 1b. Compute the following variances for May, labor rate and efficiency variances. 1c. Compute the following variances for May, variable overhead rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect zero variance). Input all amounts as positive values. Round your answers to 2 decimal places. Materials: Price variance 1a. Materials price variance 1a. Materials quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency variance Quantity variance abor: Rate variance Efficiency variance Variable overhead: 0.00 0.00 Rate variance Efficiency variance 0.00 Excess of actual over standard cost per unit $ 0.00 How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor timer Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round your final answers to 2 decimal places. Excess of actual over standard cost per unit Less portion attributable to labor inefficiency: Labor efficiency variance Variable overhead efficiency variance Portion due to other variances 0.00 $ 0.00 Show less A 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. Direct materials: Standard: 1.80 feet at $1.00 per foot Actual: 1.75 feet at $1.40 per foot Direct labor: Standard: 0.90 hours at $15.00 per hour Actual: 0.95 hours at $14.60 per hour Variable overhead: Standard: 0.90 hours at $6.00 per hour Actual: 0.95 hours at $5.60 per hour Total cost per unit Excess of actual cost over standard cost per unit Standard Cost per Unit $ 1.80 13.50 5.40 $ 20.70 $ 0.94 Actual Cost per Unit $ 2.45 13.87 5.32 $ 21.64 The production superintendent was pleased when he saw this report and commented: "This $0.94 excess cost is well within the 5 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 10,000 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 b. c. Materials price and quantity variances. Labor rate and efficiency variances. Variable overhead rate and efficiency variances. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. 2. 3. How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor time? a. Compute the following variances for May, materials price and quantity variances. 1b. Compute the following variances for May, labor rate and efficiency variances. 1c. Compute the following variances for May, variable overhead rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect zero variance). Input all amounts as positive values. Round your answers to 2 decimal places. Materials: Price variance 1a. Materials price variance 1a. Materials quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency variance Quantity variance abor: Rate variance Efficiency variance Variable overhead: 0.00 0.00 Rate variance Efficiency variance 0.00 Excess of actual over standard cost per unit $ 0.00 How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor timer Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round your final answers to 2 decimal places. Excess of actual over standard cost per unit Less portion attributable to labor inefficiency: Labor efficiency variance Variable overhead efficiency variance Portion due to other variances 0.00 $ 0.00 Show less A
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-0078111006
14th edition
Authors: Ray Garrison, Eric Noreen and Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Regarding the genetic DMA, the term anti - parallel refers to the fact
-
Determine if the events are mutually exclusive. Pick a card from an ordinary deck: Get a black card and get a red card. Mutually exclusive Not mutually exclusive X
-
Shashin has 4P dollars that he wants to invest in a savings account earning an interest rate of r at the end of every two weeks. Nimish suggests an alternative: that Shashin instead open four...
-
The American Society for Quality (ASQ) conducted a salary survey of all its members. ASQ members work in all areas of manufacturing and service-related institutions, with a common theme of an...
-
On what interval is the curve concave downward? dt
-
DeGraaf Office Supplies is a national retailer of office supplies, equipment, and furnishings. The company opened its first store in 1932, in Columbus, Ohio. Currently, DeGraaf has 300 stores...
-
Identification and Preparation of Adjusting Entries} Kuepper's Day Care is a large day care centre in Victoria, British Columbia. The day care centre serves several nearby businesses, as well as a...
-
The normal capacity of Albany Adhesives Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb of materials at an estimated cost of $2 per pound. The estimated...
-
Write down each component in calculating the time value of money and how you calculate to solve for each one in excel.
-
August 5 Sold merchandise to Gonzalez Corporation for $6,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $3,700. August 8 Purchased merchandise...
-
a. Identify and discuss which positions in a large restaurant, club, or hotel would be exempt and which would nbe nonexempt. b. Discuss the use of live tanks and when they are practical, or not. c....
-
discuss the governance structure of the SWIFT network and how it balances the interests of its member institutions with the need for maintaining global standards and compliance with regulatory...
-
During 2 0 2 3 , Vasu wants to take advantage of the annual exclusion and make gifts to his 9 married children ( plus their spouses ) and his 2 2 minor grandchildren. a . How much property can Vasu...
-
Should IRR and NPV be calculated to include the Interest expense on loans used to finance the investment when operating cash flow is negative? Explain what makes NPV the best criterion to measure the...
-
Explain and give an example of how hedging can cause liquidity problems to arise and describe two other factors which contribute to liquidity funding risk.
-
On December 31?, 2020?, Jim Aull and Mike Madar agree to combine their sole proprietorships into a partnership. Their balance sheets on December 31 are shown as? follows: Aull's Business ?...
-
In Exercises 1558, find each product. (9 - 5x) 2
-
Accounting for Notes Receivable-Honoured and Dishonoured} Yarnell Electronics sells computer systems to small businesses and has a December 31 year-end. Yarnell engaged in the following activities...
-
(NPV and IRR) You are considering a project whose cash flows are given below: a. Calculate the present value of the future cash flows of the project. b. Calculate the projects net present value. c....
-
(NPV or IRR) You are considering buying an asset that has a 3-year life and costs $15,000. As an alternative to buying the asset, you can lease it for four payments of $4,000. The first payment is...
Study smarter with the SolutionInn App