Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 8-24B Comprehensive Variance Analysis [LO8-4, LO8-5, LO8-6] Stephaney Company produces several products in its factory, including a karate robe. The company uses a standard

Problem 8-24B Comprehensive Variance Analysis [LO8-4, LO8-5, LO8-6]

Stephaney Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 750 direct labor-hours each month and produce 3,000 robes. The standard costs associated with this level of production are as follows:

Total Per Unit of Product
Direct materials $ 62,100 $ 20.70
Direct labor $ 16,200 5.40
Variable manufacturing overhead (based on direct labor-hours) $ 2,700 0.90

$ 27.00

During April, the factory worked only 700 direct labor-hours and produced 3,500 robes. The following actual costs were recorded during the month:

Total Per Unit of Product
Direct materials (11,900 yards) $ 71,400 $ 20.40
Direct labor $ 19,600 5.60
Variable manufacturing overhead $ 7,350 2.10

$ 28.10

At standard, each robe should require 3.0 yards of material. All of the materials purchased during the month were used in production.

Required:
1.

Compute the materials price and quantity variances for April: (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar amount.)

Materials price variance
Materials quantity variance

+

2.

Compute the labor rate and efficiency variances for April: (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar amount.)

Labor rate variance
Labor efficiency variance

+

3.

Compute the variable manufacturing overhead rate and efficiency variances for April: (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations. Round your final answers to the nearest dollar amount.)

Variable overhead rate variance
Variable overhead efficiency variance

+

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

Accounting And Financial Management For Residential Construction

Authors: Emma Shinn

5th Edition

0867186356, 978-0867186352

More Books

Students also viewed these Accounting questions

Question

Identify critical success factors in an ERP implementation .

Answered: 1 week ago