Question
At the beginning of June, Bezco Toy Company budgeted 10,000 toy action figures to be manufactured in June at standard direct materials and direct labor
At the beginning of June, Bezco Toy Company budgeted 10,000 toy action figures to be manufactured in June at standard direct materials and direct labor costs as follows:
Direct materials | $17,500 |
Direct labor | 5,600 |
Total | $23,100 |
The standard materials price is $0.50 per pound. The standard direct labor rate is $14.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:
Actual direct materials | $15,700 |
Actual direct labor | 5,000 |
Total | $20,700 |
There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Bezco Toy Company actually produced 8,700 units during June.
Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places and round your answers to the nearest dollar, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct materials quantity variance | $fill in the blank 1 | FavorableUnfavorableUnfavorable |
Direct labor time variance | $fill in the blank 3 |
Factory Overhead Variance Corrections
The data related to Shunda Enterprises Inc.s factory overhead cost for the production of 20,000 units of product are as follows:
Actual: | Variable factory overhead | $104,000 |
Fixed factory overhead | 74,500 | |
Standard: | 30,000 hrs. at $6 ($3.50 for variable factory overhead) | 180,000 |
Productive capacity at 100% of normal was 28,900 hours, and the factory overhead cost budgeted at the level of 30,000 standard hours was $178,900. Based on these data, the chief cost accountant prepared the following variance analysis:
Variable factory overhead controllable variance: | |||
Actual variable factory overhead cost incurred | $104,000 | ||
Budgeted variable factory overhead for 30,000 hours | (105,000) | ||
Variancefavorable | $(1,000) | ||
Fixed factory overhead volume variance: | |||
Normal productive capacity at 100% | 28,900 | hrs. | |
Standard for amount produced | (30,000) | ||
Productive capacity not used | 1,100 | hrs. | |
Standard variable factory overhead rate | x $6 | ||
Varianceunfavorable | 6,600 | ||
Total factory overhead cost varianceunfavorable | $5,600 |
Compute the following to assist you in identifying the errors in the factory overhead cost variance analysis. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your interim computations to the nearest cent, if required.
Variance | Amount | Favorable/Unfavorable |
Variable Factory Overhead Controllable Variance | $fill in the blank 1 | FavorableUnfavorableFavorable |
Fixed Factory Overhead Volume Variance | $fill in the blank 3 | FavorableUnfavorableFavorable |
Total Factory Overhead Cost Variance | $fill in the blank 5 |
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