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Case #2 Nojar Inc. manufacturers a product that is packaged and sold in 30-kilogram bags. For 2022, the company developed the following standard costs per
Case #2 Nojar Inc. manufacturers a product that is packaged and sold in 30-kilogram bags. For 2022, the company developed the following standard costs per bag for direct materials and direct labour: Direct materials (30 kilograms @ $4.50 per kilogram) Direct labour (0.2 hours @ $30 per hour) Total standard cost per 30-kg bag $135.00 6.00 $141.00 For April, the company manufactured 2,500 bags. The company purchased 78,000 kilograms of input costing $344,760 and used 76,200 kilograms. As well, the company paid $15,360 for direct labour and used 480 labour hours. Required: (A) Compute the materials price variance and materials usage variance and indicate whether each variance is favourable or unfavourable. (B) Compute the labour rate variance and labour efficiency variance and indicate whether each variance is favourable or unfavourable. (C) Provide possible reasons for each of the variances computed in (A) and (B). For example, regarding the materials price variance, why would the variance be favourable / unfavourable? Case #3 Login Corp. employs a standard costing system. The company has capacity to produce 35,000 units per year and applies overhead is applied on the basis of direct labour hours. The standard costing system allows two direct labour hours per unit produced. For 2022, the company budgeted variable overhead to be $266,000 and fixed overhead to be $315,000. Actual results for the year are as follows: Units produced Direct labour Variable overhead Fixed overhead 32,000 62,500 hours $243,750 $324,000 (A) Compute the predetermined variable overhead rate (SVOR). (B) Compute the variable overhead spending variance and the variable overhead efficiency variance and indicate whether each variance is favourable or unfavourable. (C) Compute the predetermined fixed overhead rate (SFOR). (D) Compute the applied fixed overhead. (E) Compute the fixed overhead spending variance and the fixed overhead volume variance. (F) What does each variance proport to measure
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