Question
2.- Budget Variances, Materials and Labor Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set
2.- Budget Variances, Materials and Labor
Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards for materials and labor:
Leather (5 strips @ $5.00) $25.00 Direct labor (0.5 hr. @ $8.00) 4.00 Total prime cost $29.00
During the first month of the year, the Boise plant produced 46,000 belts. Actual leather purchased was 130,000 strips at $3.00 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 34,000 hours at $9.00 per hour.
Required:
1. Compute the costs of leather and direct labor that should be incurred for the production of 46,000 leather belts.
Materials $fill in the blank 1 Labor $fill in the blank 2
2. Compute the total budget variances for materials and labor.
Total Budget Variance Materials $fill in the blank 3 FavorableUnfavorable Labor $fill in the blank 5 FavorableUnfavorable
Budget Variances, Materials and Labor
Cinturon Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards for materials and labor:
| Leather (5 strips @ $5.00) | $25.00 |
| Direct labor (0.5 hr. @ $8.00) | 4.00 |
| Total prime cost | $29.00 |
During the first month of the year, the Boise plant produced 46,000 belts. Actual leather purchased was 130,000 strips at $3.00 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 34,000 hours at $9.00 per hour.
Required:
1. Compute the costs of leather and direct labor that should be incurred for the production of 46,000 leather belts.
| Materials | $fill in the blank 1 |
| Labor | $fill in the blank 2 |
2. Compute the total budget variances for materials and labor.
| Total Budget Variance | ||
| Materials | $fill in the blank 3 | FavorableUnfavorable |
| Labor | $fill in the blank 5 | FavorableUnfavorable |
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Financial Accounting
Authors: Belverd E. Needles
5th Edition
0395698022, 978-0395698020
