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Green Blankets, Inc. uses a standard cost system to plan, direct, and control operations. The company converts green yarn into 3 x 5 blankets and

Green Blankets, Inc. uses a standard cost system to plan, direct, and control operations. The company converts green yarn into 3x5 blankets and sells them to distributors. favorable
unfavorable
Management allocates variable and fixed overhead based on direct labor hours.
Green Blankets, Inc.
Partial Income Statement
For the month ended July 31,20XX
actual budget (AC - SC) x AQ
Sales in units 2,000.002,000.00(AQ - SQ) x SC
Average sales price per unit 125.00125.00(AQ x AC)-(SQ x SC)
AFO - BFO
Sales revenue 250,000.00250,000.00(total budgeted production X standard quantity for one blanket)
Variable manufacturing costs (total cost / total quantity)
Direct materials 81,000.0056,000.00 budgeted fixed overhead - allocated
Direct Labor 99,000.0096,000.00 actual - budget
Allocated overhead 22,500.0016,000.00
Fixed manufacturing costs --
Allocated overhead 63,000.0050,000.00
Cost of Goods Manufactured and sold 265,500.00218,000.00
Gross Profit $(15,500.00) $32,000.00
COMPUTE THE DIRECT MATERIALS COST VARIANCE
The standard amount of yarn for one blanket is 1,400.00 yards
Select the correct formula:
What is the total quantity of direct materials budgeted (SQ)? yards
Select the correct formula:
What is the standard direct materials cost per unit (SC)? per yard
Direct materials purchased and used (AQ): 2,700,000 yards of green yarn
Select the correct formula:
What is the actual direct materials cost per unit (AC)? per yard
Select the correct formula:
What is the direct materials cost variance?
Interpret this variance
COMPUTE THE DIRECT MATERIALS EFFICIENCY VARIANCE
Select the correct formula:
What is the direct materials efficiency variance?
Interpret this variance
COMPUTE THE DIRECT LABOR COST VARIANCE
The standard amount of time for one blanket is: 4 hours
Select the correct formula:
What is the total quantity of direct LABOR budgeted (SQ)? hours
Select the correct formula:
What is the standard direct labor cost per hour (SC)? per hour
Direct labor incurred (AQ): 9,000.00 hours
Select the correct formula:
What is the actual direct labor cost per hour (AC)? per hour
Select the correct formula:
What is the direct labor cost variance?
Interpret this variance
COMPUTE THE DIRECT LABOR EFFICIENCY VARIANCE
Select the correct formula:
What is the direct labor efficiency variance?
Interpret this variance
COMPUTE THE VARIABLE OVERHEAD COST VARIANCE
The standard amount of time for one blanket is: 4 hours
Select the correct formula:
What is the total quantity of direct LABOR budgeted (SQ)? hours
Select the correct formula:
What is the standard variable overhead cost per hour (SC)? per hour
Direct labor incurred (AQ): 9,000.00 hours
Select the correct formula:
What is the actual variable overhead cost per hour (AC)? per hour
Select the correct formula:
What is the variable overhead cost variance?
Interpret this variance
COMPUTE THE VARIABLE OVERHEAD EFFICIENCY VARIANCE
Select the correct formula:
What is the variable overhead efficiency variance?
Interpret this variance
COMPUTE THE FIXED OVERHEAD VARIANCE
Select the correct formula:
What is the fixed overhead variance?
Interpret this variance

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