Question
The SCC Division of the Big-Drug Company uses standard costing to help control their production costs. The divisions main product is a pharmaceutical product that
The SCC Division of the Big-Drug Company uses standard costing to help control their production costs. The divisions main product is a pharmaceutical product that comes in a multi-dose package. The standard variable costs per package are given below:
Direct materials (chemical ingredients 1.25 ounces @$0.95 per ounce) |
Direct materials (packaging 1 package piece @$0.53 per package piece) |
Direct labor (0.25 hour @ $18.00 per hour) |
Variable overhead ($1.75 per direct labor hour) |
Fixed overhead ($4.00 per direct labor hour)
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During the most recent month, 90,000 packages of the product were produced. Other salient information related to the production of the 90,000 packages follows:
Actual variable overhead | $38,600.00 |
Actual fixed overhead | $92,000.00 |
Actual direct labor hours | 22,700 |
Actual direct labor hourly rate | $18.02 |
DM chemicals purchase price | $0.930 |
DM chemicals purchase quantity | 115,000 |
DM packages purchase price | $0.54 |
DM packages purchase quantity | 93,000 |
DM chemicals used | 114,000 |
DM packages used | 93,000 |
Fixed Overhead Budget | $95,000 |
Required: For questions 22-30 compute each of the following variances indicating both the dollar amount and whether the amount is favorable (F) or unfavorable (U). If a variance is zero, please input zero for the dollar amount and leave the F and U columns blank.
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| Dollar Amount | F | U |
22. | DM chemical purchase price variance |
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23. | DM chemical efficiency (quantity) variance |
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24. | DM packaging purchase price variance |
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25 | DM packaging efficiency (quantity) variance |
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26 | Direct Labor rate variance |
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27 | Direct Labor efficiency variance |
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28 | The variable overhead spending variance |
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29, | The variable overhead efficiency variance |
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30. | The fixed overhead spending variance |
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