3.000 3,000 et operating income (los) $ 10.500 (3.165) "Contains direct materials, direct labot and variable manufacturing overhead Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to get things control Upon reviewing the plant's income statement, Ms Dunn has concluded that the major problem lies in the variable goods sold. She has been provided with the following standard cost per swimming pool Direct labor Variable watatu wachand "Based on machine hours. During June the plant produced 5,000 pools and incurred the following costs: a Purchased 21500 pounds of materials at a cost of $3.25 per pound b. Used 16,300 pounds of materials in production Finished goods and work in process inwentaries we insignificant and amb ignored) Worked 4,000 direct labor hours at a cost of $70 per hour dincurred variable manufacturing overhead cost totaling $90.890 for the month A total of 3300 machine hours was recorded It is the company's policy to close all variances to cost of goods sold on a monthly basis. Total standard cost per unit "Based on machine-hours. During June the plant produced 5,000 pools and incurred the following costs: a. Purchased 21,500 pounds of materials at a cost of $3.25 per pound. b. Used 16,300 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 4,600 direct labor-hours at a cost of $710 per hour. d. Incurred variable manufacturing overhead cost totaling $10,890 for the month. A total of 3,300 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: a. Materials price and quantity variances b. Labor rate and efficiency variances c. Variable overhead rate and efficiency variances 2. Summarize the variances that you computed in (t) above by showing the net overall favorable or unfavorable variance for the month Complete this question by entering your answers in the tab Required 1 Required 2 la Compute the following variances for lune, materials price and quantity variances 1b. Compute the following variances for lune, labor rate and efficiency variances 1. Compute the following variances for June, variable overhead rate and efficiency variances (Do not round your intermediate calculations, indicate the effect of each variance by selecting unfavorable, and "None' for no effect (ie, zero variance). Input all amounts as positive values for favorable, "U" for Show less Complete this question by entering your answers in the tabs below. Required Required 2 1. Compute the following variances for June, materials price and quantity variances 1b. Compute the following variances for lune, laborate and efficiency variances tc. Compute the following variances for June, variable overhead rate and efficiency variances (Do not found your intermediate calculations indicate the effect of each variance by selecting it for avarate, tut for unfavorable, and "None' for no elle le, tero variance). Input all amounts as positive values) 1 M Labor ciency Vance 10 Variable overhead rate variance Variable overhead officinney variance Meira 2. Summarize the variantes that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month Complete this question by entering your answers in the tabs below. Required 1 Required 2 Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. Indicate the effect of each variance by selecting "F" for favorable, u for unfavorable, and "None" for n effect (le, zero variance). Input the amount as positive value.). Bered 1 Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Standard Cost per Direct mater Standard 1.90 feet at $3.00 per foot Actual 1.85 feet at $3.40 per foot Direct labore Standard 1.00 hours at $18.00 per hour Actual: 1.05 hours at $17.40 per hour Standard 1.00 hours at 58.90 per hour Actual: 1.05 hours at $7.60 per hour Total cost per unit Excess of actual cost over standard cost per unit The production superintendent was pleased when he saw this report and commented: "This $0.84 excess cost is well within the 4 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product." Actual production for the month was 15,000 units. Variable overhead cost is assigned to products on the basis of direct labor hours. There were no beginning or ending inventories of materials Required: 1. Compute the following variances for May a. Materials price and quantity variances b. Labor rate and efficiency variances Variable overhead rate and efficiency variances 2. How much of the SO B4 excess unit cost is traceable to each of the variances computed in (1) above 3. How much of the $0.84 excess unit cost is traceable to apparent inefficient use of labor time? Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 John Fleming, chief administrator for Valley View Hospital, is concerned about the costs for tests in the hospital's lab. Charges for lab tests are consistently higher at Valley View than at other hospitals and have resulted in many complaints. Also, because of strict regulations on amounts reimbursed for lab tests, payments received from insurance companies and governmental units have not been high enough to cover lab costs. Mr. Fleming has asked you to evaluate costs in the hospital's lab for the past month. The following information is available: a. Two types of tests are performed in the lab-blood tests and smears. During the past month, 1,300 blood tests and 4,000 smears were performed in the lab. b. Small glass plates are used in both types of tests. During the past month, the hospital purchased 20,000 plates at a cost of $79,800 3,000 of these plates were unused at the end of the month no plates were on hand at the beginning of the month. c. During the past month, 3,000 hours of labor time were recorded in the lab at a cost of $33,900. d. The lab's variable overhead cost last month totaled $25,800 Valley View Hospital has never used standard costs. By searching industry literature, however, you have determined the following nationwide averages for hospital labs: Plates: Three plates are required per lab test. These plates cost $4,20 each and are disposed of after the test is completed. Labor Each blood test should require 0.8 hours to complete, and each smear should require 0.40 hours to complete. The average cost of this lab time is $12.20 per hour Overhead: Overhead cost is based on direct labor hours. The average rate for variable overhead is $8.10 per hour Required: 1. Compute a materials price variance for the plates purchased last month and a materials quantity variance for the plates used last month 2. For labor cost in the lab: a. Compute a labor rate variance and a labor efficiency variance b. In most hospitals, one-half of the workers in the lab are senior technicians and one-half are assistants. In an effort to reduce costs, Valley View Hospital employs only one fourth senior technicians and three-fourths assistants. Would you recommend that this policy be continued? 3-a. Compute the variable overhead rate and efficiency variances 3.b. Is there any relation between the variable overhead efficiency variance and the labor efficiency variance? You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Maintenance Supplies Indirect labor Depreciation Cost Formula $16,400 plus $0.17 per machine-hour 38,400 plus $1.50 per machine-hour $0.50 per machinewhour $94,100 plus $1.00 per machine-hour $68, 100 Actual Cost in March 21,940 $ 67,400 $ 10,800 $136.900 $ 69,800 During March, the company worked 20,000 machine-hours and produced 14,000 units. The company had originally planned to work 22.000 machine-hours during March Required: 1. Prepare a flexible budget for March 2. Prepare a report showing the spending variances for March Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a flexible budget for March. (Input all amounts as positive values.) FAB Corporation Flexible Budget For the Month Ended March 31 Machine-hours Marvel Parts, Inc., manufactures auto accessories. One of the company's products is a set of seat covers that can be adjusted to fit nearly any small car. The company uses a standard cost system for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,070 hours each month to produce 2,140 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct laborehours) Total $ 26,964 $ 11,770 Per Set of Covers $12.60 5.50 $. 3,638 1.70 $19.80 During August, the factory worked only 1.000 direct labor-hours and produced 2,400 sets of covers. The following actual costs were recorded during the month: Direct Materials 6,000 yards) Direct labor Variable manufacturing overhead Total $ 29,280 $13.680 Per Set of Covers $12.20 5.70 $20,30 At standard, each set of covers should require 1.5 yards of material. All of the materials purchased during the month were used in production Required: 1. Compute the materials price and quantity variances for August. 2. Compute the labor rate and efficiency variances for August 3. Compute the variable overhead rate and efficiency variances for August (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie., zero variance). Input all amounts as positive values.) 5 148.000 140,000 et operating income (Loss) "Contains direct materials, direct labot and variable manufacturing overhead Janet Dunn, who has just been appointed general manager of the Westwood Plant has been given instructions to get things control Upon reviewing the plant's income statement, Ms Dunn has concluded that the major problem lies in the variable goods sold. She has been provided with the following standard cost per swimming pool Variable naturische Total standard cost per "Based on machine-hours. During June the plant produced 5,000 pools and incurred the following costs: a Purchased 21500 pounds of materials at a cost of $3.25 per pound b. Used 16,300 pounds of materials in production Finished goods and work in process inventories we insignificant and can be ignored) Worked 4,600 direct labor hours at a cost of 570 per hour dincurred variable manufacturing overhead cost totaling 50.000 for the month A total of 3.300 machine-hours was recorded It is the company's policy to close all variances to cost of goods sold on a monthly bases. Total standard cost per unit "Based on machine-hours. During June the plant produced 5,000 pools and incurred the following costs: a. Purchased 21,500 pounds of materials at a cost of $3.25 per pound. b. Used 16,300 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 4,600 direct labor-hours at a cost of $710 per hour. d. Incurred variable manufacturing overhead cost totaling $10,890 for the month. A total of 3,300 machine-hours was recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: a. Materials price and quantity variances b. Labor rate and efficiency variances Variable overhead rate and efficiency variances 2. Summarize the variances that you computed in (t) above by showing the net overall favorable or unfavorable variance for the month Complete this question by entering your answers in the tab Required Required 2 La Compute the following variances for June, materials price and quantity variance 1b. Compute the following variances for lune, laborate and efficiency variances 1. Compute the following variances for June, variable overhead rate and efficiency variances (Do not round your intermediate calculations indicate the effect of each variance by selecting unfavorable, and "None for no effect (ie, zero variance). Input all amounts as positive values for favorable, "U" for