Flexible budget, direct materials and direct manufacturing labour variances. Tuscany Statuary manufactures bust statues of famous historical
Question:
Flexible budget, direct materials and direct manufacturing labour variances. Tuscany Statuary manufactures bust statues of famous historical figures. All statues are the same size.
Each unit requires the same amount of resources. The following information is from the static budget for 2007:
Expected production and sales 5,000 units Direct materials 50,000 kg Direct manufacturing labour 20,000 hours Direct fixed costs $ 1,2 00,000 Standard quantities, standard prices, and standard unit costs follow' for direct materials and direct manufacturing labour.
Standard Standard Standard Quantity Price Unit Cost Direct materials 10 kilograms $12 per kilogram $120 Direct manufacturing labour 4 hours $48 hour $192 During 2007, actual number of units produced and sold was 6,000. Actual cost of direct materials used was $792,000, based on 60,000 kilograms purchased and used at $13.20 per kilogram.
Direct manufacturing labour-hours actually used were 25,000, at the rate of $45 per hour. This resulted in actual direct manufacturing labour cost of $1,125,000. Actual fixed costs were $1,206,000. There were no beginning or ending inventories.
Required 1. Calculate sales volume variance and flexible-budget variance. Level 2.
2. Compute price and efficiency variances for direct materials and direct manufacturing labour. Level 3.
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 9780131971905
4th Canadian Edition
Authors: Charles T. Horngren, George Foster, Srikant M. Datar, Howard D. Teall