*Problem 12-51A Montreal Inc. manufactures garden hoses for large stores. The standard costs for a dozen garden hoses are as follows: Direct materials 21 m x $2 per metre $42.00 Direct labour 3.40 hours x $11 per hour $37.40 During February, Montreal Inc. worked on three separate orders of garden hoses. Job cost records for the month disclose the following: Lot Units in Lot Materials used Hours worked 4503 1,090 dozen 23,108 m 2,980 4504 1,580 dozen 33,496 m 5,070 4505 2,600 dozen 55,120 m 2,880 You have been able to gather the following information: 1. Montreal Inc. purchased 100,000 m of material during February at a cost of $220,000. The material price variance is recorded when goods are purchased, and a inventories are carried at standard cost. 2. The payroll department reported that production employees were paid $11.4 per hour. 3. There was no beginning work in process. During February, lots 4503 and 4504 were completed, and all materials were issued for lot 4505, which was 60% complete in terms of labour. 4, Montreal Inc. applies fixed and variable overhead based on machine hours. Below are the results for Montreal Inc. for the month of February: The normal activity in machine hours 39,100 Flexible budget variable overhead per machine hour $2.75 Actual variable overhead cost incurred 117,000 Actual fixed overhead cost incurred 299,000 Variable overhead cost applied to production 117,500 Variable overhead efficiency variance (unfavourable) 8,200 Fixed overhead budget variance (unfavourable) 2,000 *Problem 12-51A Montreal Inc. manufactures garden hoses for large stores. The standard costs for a dozen garden hoses are as follows: Direct materials 21 m x $2 per metre $42.00 Direct labour 3.40 hours x $11 per hour $37.40 During February, Montreal Inc. worked on three separate orders of garden hoses. Job cost records for the month disclose the following: Lot Units in Lot Materials used Hours worked 4503 1,090 dozen 23,108 m 2,980 4504 1,580 dozen 33,496 m 5,070 4505 2,600 dozen 55,120 m 2,880 You have been able to gather the following information: 1. Montreal Inc. purchased 100,000 m of material during February at a cost of $220,000. The material price variance is recorded when goods are purchased, and a inventories are carried at standard cost. 2. The payroll department reported that production employees were paid $11.4 per hour. 3. There was no beginning work in process. During February, lots 4503 and 4504 were completed, and all materials were issued for lot 4505, which was 60% complete in terms of labour. 4, Montreal Inc. applies fixed and variable overhead based on machine hours. Below are the results for Montreal Inc. for the month of February: The normal activity in machine hours 39,100 Flexible budget variable overhead per machine hour $2.75 Actual variable overhead cost incurred 117,000 Actual fixed overhead cost incurred 299,000 Variable overhead cost applied to production 117,500 Variable overhead efficiency variance (unfavourable) 8,200 Fixed overhead budget variance (unfavourable) 2,000
