Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help with questions a, b, c and d please. Stratton, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans
I need help with questions a, b, c and d please.
Stratton, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Standard Quantity Standard Cost 200 yards $6.00 Standard Price $3 per yard $ 14 per DLH $ 3.20 per DLH $3 per DLH 0.75 DLH Direct materials Direct labor Variable overhead Fixed overhead 10.50 0.75 DLH 240 0.75 DLH 2.25 $ 21.15 Sandy Robison, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November The company purchased 82,000 yards of fabric and used 93,700 yards of fabric during the month. Fabric purchases during the month were made at $ 2.80 per yard. The direct labor payroll ran $ 457,375, with an actual hourly rate of $ 12.50 per direct labor hour. The annual budgets were based on the production of 600,000 shirts, using 450,000 direct labor hours. Though the budget for November was based on 45,000 shirts, the company actually produced 42.500 shirts during the month. Variable Overhead Budget Annual Budget Per Shirt November-Actual Indirect material $720,000 $ 1.20 $ 52.900 Indirect labor 450,000 0.75 31,400 Equipment repair 180,000 0.30 13.700 Equipment power 90.000 0.15 6,500 Total $ 1,440.000 $ 2.40 $ 104,500 Fixed Overhead Budget Annual Budget November-Actual Supervisory salaries $430,000 $ 37,200 Insurance 140,000 11,500 Property taxes 60.000 5.000 Depreciation 245.000 21,300 Utilities 225.000 18.000 Quality inspection 250.000 22,400 Total $ 1.350.000 $ 115,400 (a) Calculate the direct materials price and quantity variances for November. (If variance is zero, select "Not Applicable" and enter for the amounts.) Direct material price variance $ Direct material quantity variance Unfavorable Favorable (b) Calculate the direct labor rate and efficiency variances for Noven Not Applicable select "Not Applicable and enter for the amounts.) to O decimal places, eg. 125. If variance is zero, Direct labor rate variance $ Direct labor efficiency variances (c) Calculate the variable overhead spending and efficiency variances for November. (Round answers to decimal places, eg. 125. If variance is zero, select "Not Applicable" and enter for the amounts.) $ 12588 Favorable v Variable overhead spending variance $ 15088 Unfavorable Variable overhead efficiency variance (d) Calculate the fixed overhead spending variance for November. (Round answer to decimal places, eg 125. If variance is zero, select "Not Applicable" and enter O for the amounts) 2900 Unfavorable Fixed overhead spending variance Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started