Standard Job Order Costing $-$

Variance Analysis

Special order lamps are manufactured in division S$.$ Because of the precise nature of the process a

standard cost system has been developed. The following standards are used for the special orders:

Standards

Figurines $$9\mathrm{.}500000$ per lamp

Electrical Sets $1\mathrm{.}300000$ per lamp

Lamp Shade per lamp

Direct Labor $2\mathrm{.}400000$ per lamp $(4$ lamps$/$hr$.)$

Variable Overhead per lamp $(4$ lamps$/$hr$.)$

$**$ Fixed Overhead per lamp

Total

$**$ Fixed overhead is based on expected production of ##### customized lamps each month.

To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries

are made to the Job Order System at actual cost $($overhead is applied based on actual labor hours$)$

while entries are made to the accounting system at standard. Variance analysis is used to analyze the

differences.

Job Order Costing Section

On January $1,20$x$2,$ Division S began Job $1101$ for the Client, THE BIG CHILDREN STORE. The

job called for $4,000$ customized lamps. The following set of transactions occurred from

January $5$ until the job was completed:

$5-$Jan Purchased $4,050$ figurines @ $$9\mathrm{.}55$ per figurine.

$6-$Jan Purchased $4,175$ sets of electical components @ $$1\mathrm{.}55$ per set.

$7-$Jan Purchased $4,000$ lamp shades @ $$6\mathrm{.}35$ per set.

$8-$Jan $4,050$ figurines were requisitioned.

$9-$Jan $4,150$ sets of electrical components were requisitioned.

$17-$Jan Payroll of $620$ Direct Labor Hours @ $$9\mathrm{.}80$ per hour.

$28-$Jan $3,994$ lamp shades were requisitioned

$30-$Jan Payroll of $670$ Direct Labor Hours @ $$10\mathrm{.}05$ per hour.

$30-$Jan $3,994$ lamps were completed and shipped. All materials requisitioned were

used or scrapped.

Month End Overhead Information

Actual Variable Overhead $$1,522\mathrm{.}20$

Actual Fixed Overhead $$40,873\mathrm{.}45$

How many Lamps were completed?

Note: Show favorable variances as negative numbers

Round dollars to two places, $##$.$##

What was the total material price variance for the figurines purchased? $$202\mathrm{.}50\{20\mathrm{.}01\}$

What was the material usage variance for figurines? $$532\mathrm{.}00\{20\mathrm{.}02\}$

What was the material price variance for the electrical components $?$ $$1,043\mathrm{.}75\{20\mathrm{.}03\}$

What was the material usage variance for electrical components? $$202\mathrm{.}80\{20\mathrm{.}04\}$ Mary correctly completed the material variances for the lamp shades and the overhead variences.

Her work is correct however, in reviewing her work the standards were crossed out.

The total material price variance for the lamp shades purchased:

The variable overhead efficiency variance:

The variable $OH$ spending variance:

The fixed $OH$ volume $($denominator$)$ variance:

The fixed $OH$ spending variance:

What was the standard cost of a Lamp Shade?

What was the standard cost per lamp for the variable overhead?

What was the budgeted fixed overhead?

What was the standard cost per lamp for the fixed overhead?

What was the monthly expected production of customized lamps

that was used to determine the standard fixed overhead rate?

$\{21\mathrm{.}01\}$

$\{21\mathrm{.}02\}$

$\{21\mathrm{.}03\}$

$\{21\mathrm{.}04\}$

$\{21\mathrm{.}05\}$

What was the direct labor efficiency variance $?$ $$2,798\mathrm{.}40\{20\mathrm{.}05\}$

What was the direct labor rate variance? $$425\mathrm{.}50\{20\mathrm{.}06\}$