Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Clarissa McWhirter, vice-president of Cyprus Company, was pleased to see a small variance on the income statement after the trouble the company had been having

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Clarissa McWhirter, vice-president of Cyprus Company, was pleased to see a small variance on the income statement after the trouble the company had been having In controlling manufacturing costs. She noted that the $6,476 overall manufacturing variance reported last period was well below the 3% limit that had been set for variances. The company produces and sells a single product. The standard cost card for the product follows: 8.00 $ 7.00 Standard Cost Card-Per Unit Direct material, 4 metres at $2.00 per metre Direct labour, 1.0 direct labour-hours $7.0 per direct labour-hour Variable overhead, 1.0 direct labour-hours at $2.1 per direct labour-hour Tixed overhead, 1.0 direct labour-hours at $5 per direct labour-hour 2.10 5.00 Standard cost per unit $ 22.10 The following additional information is available for the year just completed: a. The company manufactured 15,000 units of product during the year. b. A total of 59,200 metres of material was purchased during the year at a cost of $2.28 per metre. All of this material was used to manufacture the 15,000 units. There were no beginning or ending inventories for the year c. The company worked 15,500 direct labour-hours during the year at a cost of $6.80 per hour. d.Overhead cost is applied to products on the basis of standard direct labour-hours. Data relating to manufacturing overhead costs follow: Denominator activity level direct labour-hours) budgeted fixed overhead costs from the flexible budget) Actual fixed overhead costs htul variable overhead costs $ $ $ 13,000 65,000 63,050 34,550 Required: 1. Compute the direct materials price and quantity variances for the year. (Indicate the effect of each variance by selecting "P" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance).) Materials price variance Materials quantity variance 2. Compute the direct labour rate and efficiency variances for the year. (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (ie, zero variance).) Labour rate variance Labour officiency variance 3. For manufacturing overhead, compute the following: a. The variable overhead spending and efficiency variances for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance).) Variable overhead spending variance Variable overhead officiency variance b. The fixed overhead budget and volume variances for the year. (Indicate the effect of each varlance by selecting "F* for favorable. "U" for unfavorable, and "None" for no effect (.e., zero variance).) Fixed overhead budget variance Fixed overhead volume variance 4. Compute the total variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (.e., zero variance). Input all amounts as positive values.) Towariance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Financial Accounting (Chapters 1-17)

Authors: John Wild

24th Edition

1260158608, 9781260158601

More Books

Students also viewed these Accounting questions

Question

Explain the importance of staffing in business organisations

Answered: 1 week ago

Question

What are the types of forms of communication ?

Answered: 1 week ago

Question

Explain the process of MBO

Answered: 1 week ago