The Atlanta Company uses a standard cost system in which manufacturing overhead costs are applied to...
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The Atlanta Company uses a standard cost system in which manufacturing overhead costs are applied to units of the company's single product on the basis of direct labor-hours (DLHs). The standard cost card for the product follows: Standard Cost Card-per unit of product: Direct Materials, 4 yards at $3.50 per yard Direct Labor, 1.5 DLHs at $8 per DLH Variable Overhead, 1.5 DLHs at $2 per DLH Fixed Overhead, 1.5 DLHs at $6 per DLH The following data pertain to last year's activities: The company manufactured 18,000 units of product during the year. A total of 70,200 yards of material was purchased during the year at a cost of $3.75 per yard. All of this material was used to manufacture the 18,000 units. The company worked 29,250 direct labor-hours during the year at a cost of $7.80 per hour. The budgeted activity level was 22,500 direct labor-hours. Budgeted fixed manufacturing overhead costs were $135,000 while actual manufacturing overhead costs were $133,200. Actual variable manufacturing overhead costs were $61,425. Compute the direct labor efficiency variance for the year. The Atlanta Company uses a standard cost system in which manufacturing overhead costs are applied to units of the company's single product on the basis of direct labor-hours (DLHs). The standard cost card for the product follows: Standard Cost Card-per unit of product: Direct Materials, 4 yards at $3.50 per yard Direct Labor, 1.5 DLHs at $8 per DLH Variable Overhead, 1.5 DLHs at $2 per DLH Fixed Overhead, 1.5 DLHs at $6 per DLH The following data pertain to last year's activities: The company manufactured 18,000 units of product during the year. A total of 70,200 yards of material was purchased during the year at a cost of $3.75 per yard. All of this material was used to manufacture the 18,000 units. The company worked 29,250 direct labor-hours during the year at a cost of $7.80 per hour. The budgeted activity level was 22,500 direct labor-hours. Budgeted fixed manufacturing overhead costs were $135,000 while actual manufacturing overhead costs were $133,200. Actual variable manufacturing overhead costs were $61,425. Compute the direct labor efficiency variance for the year.
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Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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