PART 6 Standard Job Order Costing - Variance Analysis Special order lamps are manufactured in division S. Because of the precise nature of the process a standard cost system has been developed. The following standards are used for the special orders: Standards Figurines Electrical Sets Lamp Shade Direct Labor Variable Overhead Fixed Overhead Total $ 9.500000 per lamp 1.300000 per lamp per lamp 2.400000 per lamp (4 lamps/hr.) per lamp (4 lamps/hr.) per lamp * Fixed overhead is based on expected production of #4444 customized lamps each month. To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) while entries are made to the accounting system at standard. Variance analysis is used to analyze the differences Job Order Costing Section On January 1, 20x2. Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,075 figurines @ $9.45 per figurine. 6-Jan Purchased 4,225 sets of electical components @ $1.65 per set. 7-Jan Purchased 4,000 lamp shades @ $6.35 per set. 8-Jan 4,075 figurines were requisitioned. 9-Jan 4,200 sets of electrical components were requisitioned. 17-Jan Payroll of 640 Direct Labor Hours @ $9.80 per hour. 28-Jan 3,990 lamp shades were requisitioned 30-Jan Payroll of 690 Direct Labor Hours @ $10.05 per hour. 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were used or scrapped. Month End Overhead Information Actual Variable Overhead Actual Fixed Overhead $ 1,675.80 $ 41,373.45 How many Lamps were completed? Note: Show favorable variances as negative numbers Round dollars to two places, S##.## What was the total material price variance for the figurines purchased? (20.01) What was the material usage variance for figurines? (20.02) What was the material price variance for the electrical components ? (20.03) What was the material usage variance for electrical components? (20.04) What was the direct labor efficiency variance ? (20.05) What was the direct labor rate variance? (20.06) Mary correctly completed the material variances for the lamp shades and the overhead variences. Her work is correct however, in reviewing her work the standards were crossed out. The total material price variance for the lamp shades purchased: The variable overhead efficiency variance: The variable OH spending variance: The fixed OH volume (denominator) variance: The fixed OH spending variance: $ $ $ $ $ 880.00 Favorable 412.30 Unfavorable 26.60 Unfavorable 201.00 Unfavorable 1,072.95 Unfavorable What was the standard cost of a Lamp Shade? (21.01) What was the standard cost per lamp for the variable overhead? (21.02) What was the budgeted fixed overhead? (21.03) What was the standard cost per lamp for the fixed overhead? (21.04) What was the monthly expected production of customized lamps that was used to determine the standard fixed overhead rate? (21.05)
