Question
I would appreciate it if all was answered! Kelly Clarkson manufactures a number of products. The standards relating to one of these products are shown
I would appreciate it if all was answered!
Kelly Clarkson manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May.
Standard Cost per Unit | Actual Cost per Unit | |||||
Direct materials: | ||||||
Standard: 1.60 feet at $3.00 per foot | $ | 4.80 | ||||
Actual: 1.55 feet at $3.20 per foot | $ | 4.96 | ||||
Direct labor: | ||||||
Standard: 0.60 hours at $15.00 per hour | 9.00 | |||||
Actual: 0.65 hours at $14.40 per hour | 9.36 | |||||
Variable overhead: | ||||||
Standard: 0.60 hours at $4.00 per hour | 2.40 | |||||
Actual: 0.65 hours at $3.60 per hour | 2.34 | |||||
Total cost per unit | $ | 16.20 | $ | 16.66 | ||
Excess of actual cost over standard cost per unit | $ | 0.46 | ||||
The production superintendent was pleased when he saw this report and commented: "This $0.46 excess cost is well within the 3 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product." |
Actual production for the month was 15,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. |
Required: |
1. | Compute the following variances for May: |
a. | Materials price and quantity variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) |
Materials price variance | $ | (Click to select)UFNone |
Materials quantity variance | $ | (Click to select)NoneUF |
b. | Labor rate and efficiency variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) |
Labor rate variance | $ | (Click to select)FNoneU |
Labor efficiency variance | $ | (Click to select)NoneFU |
c. | Variable overhead rate and efficiency variances. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) |
Variable overhead rate variance | $ | (Click to select)UNoneF |
Variable overhead efficiency variance | $ | (Click to select)UNoneF |
2. | How much of the $0.46 excess unit cost is traceable to each of the variances computed in (1) above. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) |
Materials: | ||||
Quantity variance | $ | (Click to select)UNoneF | ||
Price variance | (Click to select)FUNone | $ | (Click to select)UNoneF | |
Labor: | ||||
Efficiency variance | (Click to select)FNoneU | |||
Rate variance | (Click to select)UFNone | (Click to select)NoneUF | ||
Variable overhead: | ||||
Efficiency variance | (Click to select)UNoneF | |||
Rate variance | (Click to select)UFNone | (Click to select)FUNone | ||
Excess of actual over standard cost per unit | $ | (Click to select)FUNone | ||
3. | How much of the $0.46 excess unit cost is traceable to apparent inefficient use of labor time? (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) |
Excess of actual over standard cost per unit | $ | (Click to select)FNoneU | ||
Less portion attributable to labor inefficiency: | ||||
Labor efficiency variance | (Click to select)FUNone | |||
Variable overhead efficiency variance | (Click to select)FUNone | (Click to select)FUNone | ||
Portion due to other variances | $ | (Click to select)FUNone | ||
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