Peoria Corporation produces a product using the following standard proportions and costs of material:

Pounds Cost Per

Pound

Amount

Material A 50 $5.00 $250.00

Material B 40 6.00 240.00

Material C 60 3.00 180.00

150 4.4667 $670.00

Standard shrinkage (33 1/3%) 50

Net weight and cost 100 6.70 $670.00

A recent production run yielding 100 output pounds required an input of:

Amount Cost Per

Pound

Material A 40 $5.15

Material B 50 6.00

Material C 65 2.80

Required: Material price, mix, and yield variances.

Sparkle Company began business early in January using a standard costing for its single product. With standard capacity set at 10,000 standard productive hours per month, the following standard cost sheet was set up for one unit of product:

Direct material-5 pieces @ $2.00 $10.00

Direct labor (variable)-1 sph @ $3.00 3.00

Manufacturing overhead:

Fixed-1 sph @ $3.00 $3.00

Variable-1 sph @ $2.00 2.00 5.00

Fixed costs are incurred evenly throughout the year. The following unfavorable variances from standard costs were recorded during the first month of operations:

Material price $0

Material usage 4,000

Labor rate 800

Labor efficiency 300

Overhead volume 6,000

Overhead budget (2 variance analysis) 1,000

Required:Determine the following: (a) fixed overhead budgeted for a year;(b) the number of units completed during January assuming no work in process at January 31;(c) debits made to the Work in Process account for direct material, direct labor, and manufacturing overhead;(d) number of pieces of material issued during January;(e) total of direct labor payroll recorded for January;(f) total of manufacturing overhead recorded in January.

variable. The budgeted direct labor is 10,000 hours.

Required:Fill in the blanks.

a.

Production

Flexible Budget

Applied Volume

Variance

120% ____________ ____________ ____________

100% ____________ ____________ ____________

80% ____________ ____________ ____________

60% ____________ ____________ ____________

b. What is the budget variance at the 80 percent level if the actual overhead incurred is $87,000?