Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Someone help me these q ABC Company uses a standard costing system for production costing and control. Standard direct labor hours based on practical capacity

image text in transcribed

image text in transcribed

Someone help me these q

ABC Company uses a standard costing system for production costing and control. Standard direct labor hours based on practical capacity are used to compute overhead rates. The standard cost for the one of its products is as follows: Raw material Direct labor Variable overhead Fixed overhead Quantity 4.0 kilograms 26 hours 2.6 hours 26 hours Cost per unit $ 10.00 12.00 10.00 6.00 Total Cost $ 40.00 3120 26.00 15.60 Annual practical capacity 60,000 units Cost per unit $ 9.40 10.00 Total Cost $1,222,000 600,000 During the year, the actual results are as follows Quantity Raw materials purchased 130,000 kilograms Raw materials, beginning 60,000 kilograms Raw materials, ending - kilograms Direct labor 112,000 hours Actual fixed overhead costs Actual variable overhead costs 13.00 1,456,000 756,000 860,000 Actual annual production 55,000 units Required: Compute the following variances and state if they are favorable or unfavorable. a) Direot material price variance, (2 Marks) b) Direct material efficiency variance. (2 Marks) c) Direct labor rate variance. (2 Marks) d) Direct labor efficiency variance. (2 Marks) e) Fixed manufacturing overhead spending variance. (2 Marks) f) Fixed manufacturing overhead volume variance (2 Marks) g) Name two possible causes for the labor efficiency variance. (2 Marks Theory and 4 Marks Communication) ABC Company uses a standard costing system for production costing and control. Standard direct labor hours based on practical capacity are used to compute overhead rates. The standard cost for the one of its products is as follows: Raw material Direct labor Variable overhead Fixed overhead Quantity 4.0 kilograms 26 hours 2.6 hours 26 hours Cost per unit $ 10.00 12.00 10.00 6.00 Total Cost $ 40.00 3120 26.00 15.60 Annual practical capacity 60,000 units Cost per unit $ 9.40 10.00 Total Cost $1,222,000 600,000 During the year, the actual results are as follows Quantity Raw materials purchased 130,000 kilograms Raw materials, beginning 60,000 kilograms Raw materials, ending - kilograms Direct labor 112,000 hours Actual fixed overhead costs Actual variable overhead costs 13.00 1,456,000 756,000 860,000 Actual annual production 55,000 units Required: Compute the following variances and state if they are favorable or unfavorable. a) Direot material price variance, (2 Marks) b) Direct material efficiency variance. (2 Marks) c) Direct labor rate variance. (2 Marks) d) Direct labor efficiency variance. (2 Marks) e) Fixed manufacturing overhead spending variance. (2 Marks) f) Fixed manufacturing overhead volume variance (2 Marks) g) Name two possible causes for the labor efficiency variance. (2 Marks Theory and 4 Marks Communication)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions