Question
1. Deere and Company has the following information is for their standard and actual costs. Standard Costs: Budgeted units of production - 12,000 (100% of
1.
Deere and Company has the following information is for their standard and actual costs.
Standard Costs:
Budgeted units of production - 12,000 (100% of capacity)
Standard material per unit - 14 lbs.
Standard material cost - $ 17.50 per pound
Standard labor hours per unit - 9
Standard labor rate - $23.00 per hour
Standard variable overhead rate - $9.00 per labor hour
Budgeted fixed overhead - $891,000
Fixed overhead rate is based on budgeted labor hours at 100% capacity.
Actual Cost:
Actual production - 11,200 units
Actual material purchased and used - 161,280 pounds
Actual total material cost - $2,741,760
Actual labor - 105,280 hours
Actual total labor costs - $2,379,328
Actual fixed overhead - $808,000
Actual variable overhead - $925,000
Determine: (a) the quantity variance, price variance, and total direct materials cost variance; (b) the time
variance, rate variance, and total direct labor cost variance; and (c) the volume variance, controllable
variance, and total factory overhead cost variance.
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