Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Santiago Inc. processes a base chemical into plastic. Standard costs and actual costs for direct

Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Santiago Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 78,000 units of product were as follows: Standard Costs Actual Costs Direct materials Direct labor 241,800 lbs. at $5.00 per lb. 239,400 lbs. at $4.90 per lb. 19,500 hrs. at $16.50 per hr. 19,950 hrs. at $16.90 per hr. Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 20,350 direct labor hrs.: $61,780 variable cost $103,785 fixed cost Variable cost, $3.20 Fixed cost, $5.10 Each unit requires 0.25 hour of direct labor. Required: a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance -23,940 Favorable -12,000 -35,940 V Favorable Favorable b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance 7,980 7,425 V Unfavorable 15,405 Unfavorable Unfavorable Check My Work 1 more Check My Work uses remaining Previous Direct Materials Quantity Variance Total Direct Materials Cost Variance -12,000 -35,940 Favorable Favorable b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance 7,980 7,425 15,405 v Unfavorable Unfavorable Unfavorable c. Determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Variable factory overhead controllable variance -620 Favorable 3,715 X Unfavorable 3,095 X Unfavorable Fixed factory overhead volume variance Total factory overhead cost variance Feedback Check My Wor Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit). The variable factory overhead controllable variance is the difference between the actual variable overhead costs and the budgeted variable overhead for actual production. The fixed factory overhead valume variance is the difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed overhead for the actual units produced

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

Microsoft Dynamics Ax 2012 R3 Financial Management

Authors: Mohamed Aamer

1st Edition

1784390984, 978-1784390983

More Books

Students also viewed these Accounting questions

Question

=+How will this affect the recruiting process?

Answered: 1 week ago