1

The following information is available from the records of Kamond Cut, Inc.:

Direct Materials-Assembly Department $10,000

Direct Materials-Finishing Department 15,000

Direct Labor-Assembly Department 11,000

Direct Labor-Finishing Department 20,000

Applied Overhead-Assembly Department 11,000

Applied Overhead-Finishing Department 20,000

Actual Overhead-Assembly Department 12,500

Actual Overhead-Finishing Department 17,500

a) What are the "total costs to account for" in the Assembly Department?

b) What are the conversion costs in the Finishing Department? (Be sure to show all work and label each answer clearly to receive full credit)

2

The following standard costs were developed for one of the products of Rammy Corporation:

STANDARD COST CARD PER UNIT

Materials: 4 feetx

$14.25 per foot = $ 57.00

Direct labor: 8 hoursx

$10 per hour = 80.00

Variable overhead: 8 direct labor hoursx

$8 per hour = 64.00

Fixed overhead: 8 direct labor hoursx

$12 per hour = 96.00

Total standard cost per unit $297.00

The following information is available regarding the company's operations for the period:

Units produced: 11,000

Materials purchased: 52,000 feet @ $13.95 per foot

Materials used: 40,000 feet

Direct labor: 84,000 hours costing $840,000

Manufacturing overhead incurred:

Variable $756,000

Fixed $1,000,000

Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours.

Required: (be sure to show all calculations and label each answer clearly)

a. Calculate the materials price variance.

b. Calculate the materials usage variance.