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Nikki 1 answer below » Tuna Company set the following standard unit costs for its single product. Document Preview: Tuna Company set the following standard unit costs for its single product.
 
 
 
 
 Direct materials (27 Ibs. @ $4 per Ib.)
$
108.00  
 Direct labor (8 hrs. @ $8 per hr.)
 
64.00  
 Factory overhead—variable (8 hrs. @ $5 per hr.)
 
40.00  
 Factory overhead—fixed (8 hrs. @ $7 per hr.)
 
56.00  
 
 Total standard View complete question » Tuna Company set the following standard unit costs for its single product. Document Preview: Tuna Company set the following standard unit costs for its single product.
 
 
 
 
 Direct materials (27 Ibs. @ $4 per Ib.)
$
108.00  
 Direct labor (8 hrs. @ $8 per hr.)
 
64.00  
 Factory overhead—variable (8 hrs. @ $5 per hr.)
 
40.00  
 Factory overhead—fixed (8 hrs. @ $7 per hr.)
 
56.00  
 
 Total standard cost
$
268.00  
 
 
The predetermined overhead rate is based on a planned operating volume of 60% of the productive capacity of 40,000 units per quarter. The following flexible budget information is available.
 
 
Operating Levels
 
 
 
50%
 
60%
 
70%
 Production in units
 
20,000
 
24,000
 
28,000
 Standard direct labor hours
 
160,000
 
192,000
 
224,000
 Budgeted overhead
 
 
 
 
 
 
 Fixed factory overhead
$
1,344,000
$
1,344,000
$
1,344,000
 Variable factory overhead
$
800,000
$
960,000
$
1,120,000
 
During the current quarter, the company operated at 70% of capacity and produced 28,000 units of product; actual direct labor totaled 222,000 hours. Units produced were assigned the following standard costs:
 
 
 
 
 Direct materials (756,000 Ibs. @ $4 per Ib.)
$
3,024,000  
 Direct labor (224,000 hrs. @ $8 per hr.)
 
1,792,000  
 Factory overhead (224,000 hrs. @ $12 per hr.)
 
2,688,000  
 
 Total standard cost
$
7,504,000  
 
 
Actual costs incurred during the current quarter follow:
 
 
 
 
 Direct materials (751,000 Ibs. @ $4.10)
$
3,079,100  
 Direct labor (222,000 hrs. @ $7.75)
 
1,720,500  
 Fixed factory overhead costs
 
1,968,679  
 Variable factory overhead costs
 
1,843,019  
 
 Total actual costs
$
8,611,298  
 
http://ezto.mhecloud.mcgraw-hill.com/references
1.
Compute the direct materials cost variance, including its price and quantity variances. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance)…. Attachments: Accounting.docx View less » Dec 10 2013 06:39 AM

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