1. Standard Product Cost

Atlas Furniture Company manufactures designer home furniture. Atlas uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:

Direct labor:	standard rate	$16.00 per hr.
	standard time per unit	2 hrs.
Direct materials (oak):	standard price	$10.00 per bd. ft.
	standard quantity	15 bd. ft.
Variable factory overhead:	standard rate	$2.40 per direct labor hr.
Fixed factory overhead:	standard rate	$0.80 per direct labor hr.

a. Determine the standard cost per dining room table. If required, round your answer to two decimal places. $per table

b. A standard cost system provides Atlas Furniture Companys management a cost control tool using the principle of . Using this principle, cost deviations from standards can be investigated and corrected.

2.

Factory Overhead Cost Variances

The following data relate to factory overhead cost for the production of 5,000 computers:

Actual:	Variable factory overhead	$97,000
	Fixed factory overhead	32,000
Standard:	5,000 hrs. at $24	120,000

If productive capacity of 100% was 8,000 hours and the total factory overhead cost budgeted at the level of 5,000 standard hours was $132,000, determine the variable factory overhead Controllable Variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $4 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Variance	Amount	Favorable/Unfavorable
Controllable variance	$
Volume variance	$
Total factory overhead cost variance	$

3.

The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $52 per unit. Division B is able to supply Division A with 18,300 units at a variable cost of $47 per unit. The two divisions have recently negotiated a transfer price of $48 per unit for the 18,300 units. Enter an increase as a positive number and a decrease as a negative number.

a. By how much will each division's income increase as a result of this transfer?

Division A	$
Division B	$

b. What is the total increase in income for Hibiscus Company?

$