Chapter M:8 HW Questions

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Major, Inc. manufactures travel locks. The budgeted selling price is $20 per lock, the variable cost is $6 per lock, and budgeted fixed costs are $21,000 per month. Prepare a flexible budget for output levels of 9,000 locks and 10,000 locks for the month ended April 30, 2024. . . . . . Major, Inc. Flexible Budget For the Month Ended April 30, 2024 Budget Amounts Per Unit Units 9,000 10,000X Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Superior Fender's managers have been making trade-offs? Explain.Superior Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 142,000 square feet of extruded vinyl purchased at $1.45 per square foot. Production required 420 direct labor hours that cost $12.50 per hour. The direct materials standard was seven square feet of vinyl per tender, at a standard cost of $1.50 per square foot. The labor standard was 0.023 direct labor hour per fender, at a standard cost of $1150 per hour, Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: A0 = actual cost; A0 = actual quantity; FOH = xed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance V V Dlrect materials cost variance = (A0 ' 30) X A0 = $ 7,100 F ' V Direct labor cost variance = (AC ' SC) " A0 = $ 420 U Select the required formulas, compute the efciency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: A0 = actual cost; A0 = actual quantity; FOH = xed overhead; SC = standard cost; so = standard quantity.) Formula Variance Direct materials efficiency variance = Direct labor efciency variance Data table Direct materials (cloth) 20,200 yards @ $2.10 per yard Direct labor 2,800 hours @ $13.00 per hour Variable overhead $5,300 Fixed overhead 99,000 Data table Direct materials (cloth) 2 yard(s) per book bag @ $2.10 per yard Direct labor 0.80 direct labor hours per book bag @ $13.60 per direct labor hour Variable overhead 0.80 direct labor hours per book bag @ $1.90 per direct labor hour Fixed overhead $96,800 (0.80 direct labor hours per book bag @ $11.00 per direct labor hour based on expected production of 11,000 book bags) Wooten Company produced 10,000 book bags in June, and actual amounts were as follows: Requirements (Click the icon to view the actual amounts.) 1. Compute cost and efficiency variances for direct materials, direct labor, and variable overhead. Wooten's standards were as follows: 2. Compute the cost and volume variances for fixed overhead. (Click the icon to view the standards.) . . . . . Requirement 1. Compute cost and efficiency variances for direct materials, direct labor, and variable overhead. Select the formulas to calculate direct materials cost and efficiency variances, then enter the variance amounts and the total. (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity. Label each variance as favorable (F) or unfavorable (U). Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.) Formula Variance Direct materials cost variance Direct materials efficiency variance = Total direct materials varianceStatic budget variable overhead $ 8,000 Static budget fixed overhead $ 3,200 Static budget direct labor hours 1,600 hours Static budget number of units 5,000 units The following information relates to Watson, Incr's overhead costs for the month: Click the icon to view the information.) Watson allocates manufacturing overhead to production based on standard direct labor hours. Compute the standard variable overhead allocation rate and the standard xed overhead allocation rate. Select the formula, then enter the amounts and compute the standard variable overhead allocation rate. + = Standard variable overhead allocation rate Data table Static budget variable overhead $2,300 Static budget fixed overhead $3,450 Static budget direct labor hours 1,150 hours Static budget number of units 575 units Standard direct labor hours 2 hours per unit X Requirements 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable.All - Star, Inc. uses a standard cost system and provides the following information. EEE(Click the icon to view the information.) All - Star allocates manufacturing overhead to production based on standard direct labor hours. All - Star reported the following actual results for 2024: actual number of units produced, 1,000; actual variable overhead, $5,000; actual fixed overhead, $3,500; actual direct labor hours, 1,900. Read the requirements. Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance VOH efficiency variance