Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Paynesville Corporation manufactures and sells a preservative used in food and drug ma inventories. The master budget calls for the company to manufacture and sell

image text in transcribed
image text in transcribed
Paynesville Corporation manufactures and sells a preservative used in food and drug ma inventories. The master budget calls for the company to manufacture and sell 110,000 lite liter this year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor (2 pounds @ $9) (0.5 hours @ $34) $18 17 Variable overhead is applied based on direct labor hours. The variable overhead rate is $T overhead rate (at the master budget level of activity) is $35 per unit. All non-manufacturing $1.7 million for the coming year. At the end of the year, the costs analyst reported that the sales activity variance for the year The following is the actual income statement (in thousands of dollars) for the year. $15,838 Sales revenue Less variable costs Direct materials Direct labor Variable overhead Total variable costs Contribution margin Less fixed costs Fixed manufacturing overhead Non-manufacturing costs Total fixed costs 1,738 1,760 3,480 $ 6,978 $ 8,860 1,100 1,280 $ 2,380 e on The following is the actual income statement (in thousands of dollars) for the year. $15,838 Sales revenue Less variable costs Direct materials Direct labor Variable overhead Total variable costs Contribution margin Less fixed costs Fixed manufacturing overhead Non-manufacturing costs Total fixed costs Operating profit 1,738 1,760 3,480 $ 6,978 $ 8,860 1,100 1,280 $ 2,380 $ 6,480 During the year, the company purchased 186,000 pounds of material and employed 45,400 hour Required: a. Compute the direct material price and efficiency variances. b. Compute the direct labor price and efficiency variances. c. Compute the variable overhead price and efficiency variances. (For all requirements, enter your answers in whole dollars. Indicate the effect of each variance by favorable, or "U" for unfavorable. If there is no effect, do not select either option

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

The Definitive Guide To Blockchain For Accounting And Business

Authors: Saurav K. Dutta

1st Edition

1789738687, 9781789738681

More Books

Students also viewed these Accounting questions

Question

=+ How is it best to target them through apps and mobile web?

Answered: 1 week ago

Question

List the four steps in the model for giving praise.

Answered: 1 week ago

Question

List the criteria for setting objectives.

Answered: 1 week ago

Question

Describe four content motivation theories.

Answered: 1 week ago