The Greco 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

 

The Greco 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: 1(Click the icon to view the results.) Some additional information about Greco Company's budget, standard costs and labor follows: 2(Click the icon to view additional information.) Read the requirements 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 materials purchased. DM price variance (based on purchases) $ 184,800 b. Total number of pounds of excess direct materials used. DM efficiency variance $ 759,000 Pounds of DM DM price variance (per pound) 1.10 purchased 168,000 Standard cost per pound of DM 11.50 Pounds of excess =direct materials used 66,000 c. Variable manufacturing overhead spending variance. (Label the variance as favorable (F) or unfavorable (U).) Variable mfg. OH flexible-budget variance $ 10,800 Variable mfg. OH Variable mfg. OH efficiency variance = spending variance 18,900 = $ 8,100 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 mfg Budgeted direct mfg. labor cost $ 750,000 Budgeted direct mfg labor-hour level 30,000 = Now compute the total number of actual direct manufacturing labor-hours used. (1) Direct mfg. labor costs incurred 624750 labor rate 25.00 Actual direct mfg. (2) Actual direct mfg. labor rate = labor-hours 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.