ACCY 201 - Friday Discussion Homework #12 - 10 points

3. Direct Labor (DL) Variances (1.5pts; 0.5pts each variance): Beautiful Beaches, Ltd. has set the following standards for direct labor (DL) costs per unit for the good it manufactures: Standard Hours: 2.2 DL hours per unit Standard Rate: $15 per DL hour During the month of September, the firm incurred the following actual DL costs to produce 8,000 units: Actual total Hours: 18,000 total DL hours Actual total DL cost: $270,900 a. Calculate the DL cost variance. Indicate whether this variance is favorable (F) or unfavorable (U). b. Calculate the DL rate variance. Indicate whether this variance is favorable (F) or unfavorable (U). c. Calculate the DL efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U).

4. Overhead (OH) Variances (3.5pts): Better Than That Co. provided the following information regarding Factory Overhead (OH) from its flexible OH budget. The company has an operating capacity of 100,000 units and expects to operate at 75% of its productive capacity (i.e. expects to operate at 75,000 units, which is 75%*100,000): Operating Levels (% of capacity) Flexible OH Budget: 65% 70% 75% 80% Budgeted output (units) 65,000 70,000 75,000 80,000 Budgeted DL hours 78,000 DLh 84,000 DLh 90,000 DLh 96,000 DLh Budgeted OH: Variable OH $429,000 $462,000 $495,000 $528,000 Fixed OH $630,000 $630,000 $630,000 $630,000 During the current month, the company actually operated at 70% capacity and actually used 87,500 DL hours to produce 70,000 units. The following actual overhead costs were incurred: Actual Variable OH: $455,000 Actual Fixed OH: $590,000 a. (0.5pts) Calculate the predetermined standard OH rate per DL hour for (HINT: remember to calculate these OH rates at the BUDGETED capacity): i. Variable OH ii. Fixed OH b. (0.5pts) Calculate the Variable OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U). c. (0.5pts) Calculate the Variable OH Spending Variance. Indicate whether this variance is favorable (F) or unfavorable (U). d. (0.5pts) Calculate the Variable OH Efficiency Variance. Indicate whether this variance is favorable (F) or unfavorable (U). e. (0.5pts) Calculate the Fixed OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U). f. (0.5pts) Calculate the Fixed OH Spending Variance. Indicate whether this variance is favorable (F) or unfavorable (U). g. (0.5pts) Calculate the Fixed OH Volume Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

3. Direct Labor (DL) Variances (1.5pts; 0.5pts each variance): Beautiful Beaches, Ltd. has set the following standards for direct labor (DL) costs per unit for the good it manufactures: Standard Hours: 2.2 DL hours per unit Standard Rate: $15 per DL hour During the month of September, the firm incurred the following actual DL costs to produce 8,000 units: Actual total Hours: 18,000 total DL hours Actual total DL cost: $270,900 a. Calculate the DL cost variance. Indicate whether this variance is favorable (F) or unfavorable (U). b. Calculate the DL rate variance. Indicate whether this variance is favorable (F) or unfavorable (U). c. Calculate the DL efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U). 4. Overhead (OH) Variances (3.5pts): Better Than That Co. provided the following information regarding Factory Overhead (OH) from its flexible OH budget. The company has an operating capacity of 100,000 units and expects to operate at 75% of its productive capacity (i.e. expects to operate at 75,000 units, which is 75%100,000 ): During the current month, the company actually operated at 70% capacity and actually used 87,500 DL hours to produce 70,000 units. The following actual overhead costs were incurred: a. (0.5pts) Calculate the predetermined standard OH rate per DL hour for (HINT: remember to calculate these OH rates at the BUDGETED capacity): i. Variable OH ii. Fixed OH b. (0.5pts) Calculate the Variable OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U). c. (0.5pts) Calculate the Variable OH Spending Variance. Indicate whether this variance is favorable (F) or unfavorable (U). d. (0.5pts) Calculate the Variable OH Efficiency Variance. Indicate whether this variance is favorable (F) or unfavorable (U). e. (0.5pts) Calculate the Fixed OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U). f. (0.5pts) Calculate the Fixed OH Spending Variance. Indicate whether this variance is favorable (F) or unfavorable (U). g. (0.5pts) Calculate the Fixed OH Volume Variance. Indicate whether this variance is favorable (F) or unfavorable (U)