Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May

image text in transcribed
Koontz Company 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 $ 3.74 $ 9.25 18.05 Direct materials: Standard: 1.90 feet at $4.60 per foot Actual: 1.85 feet at $5.00 per foot Direct labor: Standard: 0.95 hours at $19.00 per hour Actualt 1.00 hours at $18.50 per hour Variable overhead: Standard: 0.95 hours at $7.00 per hour Actual: 1.00 hours at $6.60 per hour Total cost per unit Excess of actual cost over standard cost per unit 18.5e 6.65 $33.44 6.60 $ 34.35 50.91 The production superintendent was pleased when he saw this report and commented: "This $0.91 excess cost is well within the 4 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 19,000 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 b. Labor rate and efficiency variances. c Variable overhead rate and efficiency variances 2. How much of the $0.91 excess unit cost is traceable to each of the variances computed in (1) above 3. How much of the $0.91 excess unit cost is traceable to apparent inefficient use of labor time? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 1a. Compute the following variances for May, materials price and quantity variances. 1b. Compute the following variances for May, labor rate and efficiency variances. Ic. Compute the following variances for May, variable overhead rate and efficiency variances. (Indicate the effect of each

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 Corporate Finance

Authors: Richard A Brealey, Stewart C Myers, Franklin Allen

8th Edition

0073130826, 9780073130828

More Books

Students also viewed these Accounting questions

Question

Please help me evaluate this integral. 8 2 2 v - v

Answered: 1 week ago