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Maple Leaf Production manufactures truck tires. The following information is available for the last operating period. Maple Leaf produced and sold 92.000 tires for $40
Maple Leaf Production manufactures truck tires. The following information is available for the last operating period. Maple Leaf produced and sold 92.000 tires for $40 each. Budgeted production was 100,000 tires. Standard variable costs per tire follow Direct materials: 4 pounds at $2 Direct labor: 0.4 hours at $18 Variable production overhead: 0.18 machine-hours at $10 per hour $ 8.00 7.20 1.80 $17.00 Total variable costs Fixed production overhead costs: Monthly budget $1.350,000 Fixed overhead is applied at the rate of $15 per tire. . Actual production costs: Direct materials purchased and used: 384,000 pounds at $1.80 Direct labor: 35,200 hours at $18.40 Variable overhead: 17,280 machine-hours at $10.20 per hour Fixed overhead 691,200 647,680 176,256 1,360,000 Required: a. Prepare a cost variance analysis for each variable cost for Maple Leaf Productions. (Indicate the effect of each varian select either option.) Direct Labor Variable Over S 647.680 $ 633,600 $ 662.400 S 14,080 $ 28,800 $ 14,720 Direct Materials Actual costs S 691,200 S 176,256 S 172,800 S 165,600 Actual inputs at standard prices 768,000 Flexible budget Price variance Efficiency variance Cost variance $ 736,000 $ 76,800 $ 3,456 U S 32,000 $ 7.200 $ 44,800 S 10,656 U
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