question:

Requirement 1. Compute the listed amounts for August. Determine the formula, then complete the computation for each. (Abbreviations used: DM = Direct materials, mfg. = manufacturing, OH = Overhead.) a. Total pounds of direct matenals purchased. Founds of DM DM price variance (based on purchases) '+ OM price variance (per pound) '= purchased 3 150,400 - B 1.10 B 184,000 b. Total number of pounds of excess direct materials used. Pounds of excess DM efficiency variance = Standard cost per pound of DM = direct materizls used 3 805,000 = 11.50 E 70,000 . Variable manufacturing overhead spending variance. (Label the variance as favorable (F) or unfavorable (U).) ariable mfg. OH Wanable mfg. OH flexible-budget variance 5 - 'Variable mfg. OH efficiency variance = spending variance - " - 3 10,850 - 3 18,000 = 3 B8.150 T F d. Total number of actual direct manufacturing labor-hours used. Determine the formula, then complete the computation for each step below. Begin by computing the standard direct manufacturing labor rate. Standard direct mig Budgeted direct mfg. labor cost '+ Budgeted direct mfg labor-hour level N lahor rate 3 750,000 = 30,000 = 3 25.00 Mow compute the total number of actual direct manufacturing labor-hours used. Actual direct mfg. Direct mfg. labor costs incurred = Actual direct mfg. labor rate B = labor-hours 524,750 + & 25.50 = 24,500 e. Total number of standard direct manufacturing labor-hours allowed for the units produced. Determine the formula, then complete the computation for each step below. Begin by computing the standard variable manufacturing overhead rate. Standard variable Budgeted variable mig. OH Budgeted direct mig labor-hour level mfg. OH rate 300,000 30,000 10.00 Next, compute the number of excess hours. Excess Variable mig. OH efficiency variance Standard variable mig. OH rate hours 19,000 10.00 1,900 Now compute the total number of standard direct manufacturing labor-hours allowed for the units produced. Standard hrs allowed Actual hours Excess hours for units produced 24,500 1,900 22.600 f. Production-volume variance. Determine the formula, then complete the computation for each step below. Begin by computing the budgeted fixed manufacturing overhead rate. Budgeted fixed Budgeted fixed mig. OH Budgeted direct mig labor-hour level mig. OH rate 630,000 30,000 21.00 Next, compute the fixed manufacturing overhead allocated. Fixed mfg OH Budgeted fixed mig OH rate Standard hours allowed for units produced allocated 21 22,600 474.800 Now compute the production-volume variance. (Label the variance as favorable (F) or unfavorable (U).) Production-volume Budgeted fixed mfg OH cost Fixed mig. OH allocated variance 630,000 474,600 155,400The Costa Company uses a flexible budget and standard costs to aid planning and control of its machining manufacturing operations. Its costing system for manufacturing has two direct-cost categories (direct materials and direct manufacturing labor-both variable) and two overhead-cost categories (variable manufacturing overhead and fixed manufacturing overhead, both allocated using direct manufacturing labor-hours). The following actual results are for August: (Click the icon to view the results.) Some additional information about Costa Company's budget. standard costs and labor follows: i (Click the icon to view additional information.) Read the requirements. - X X Req Data table More info Dete At the 30,000 budgeted direct manufacturing labor-hour level for August, budgeted direct Direct materials price variance (based on purchases) $181.500 F manufacturing labor is $750,000, budgeted variable manufacturing overhead is $390,000, and Direct materials efficiency variance $736,000 U budgeted fixed manufacturing overhead is $720,000. Direct manufacturing labor costs incurred 586,500 The standard cost per pound of direct materials is $11.50. The standard allowance is 6 pounds of direct materials for each unit of product. During August. 30,000 units of product were produced. Variable manufacturing overhead flexible-budget variance 10,450 U There was no beginning inventory of direct materials. There was no beginning or ending work in Variable manufacturing overhead efficiency variance 18,200 U process. In August, the direct materials price variance was $1.10 per pound. Fixed manufacturing overhead incurred 677,470 In July, labor unrest caused a major slowdown in the pace of production, resulting in an unfavorable direct manufacturing labor efficiency variance of $200,000. There was no direct manufacturing labor price variance. Labor unrest persisted into August. Some workers quit. Their replacements had to be hired at higher wage rates, which had to be extended to all workers. The actual average wage rate in August exceeded the standard average wage rate by $0.50 per hour Print Done Print Done