mba642_takehomeexam2

mba642_takehomeexam2 - Problem 1 Worth 10 pts. Reference...

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Problem 1 Worth 10 pts. Reference Chapter 10 and 11 The roofing company manufactures shingles. The company uses direct labor as the cost driver for the overhead calculations. Standard Cost Sheet per shingle Direct materials: Asphalt 1.5 pounds $0.06 per pound $0.09 Direct labor 0.01 hours $12 per hour $0.12 Variable Manufacturing overhead 0.01 hours $2 per hour $0.02 Fixed Manufacturing overhead 0.01 hours $10 per hour $0.10 Total standard cost per shingle $0.33 Budgeted fixed manufacturing overhead for the period is $60,000 Budgeted units to be produced 600,000 Units Standard fixed manufacturing overhead based on expected capacity of 6000 direct labor hours Shingles produced 540,000 Materials purchased: Asphalt 750,000 pounds $0.07 per pound Materials used Asphalt 744,000 pounds Direct labor 5,000 hours $62,500.00 Total direct labor cost $12.50 per hour Manufacturing overhead incurred: Variable $16,200 $3.24 per hour Fixed $55,000 Required: Don't forget to designate each variance U or F 1. Calculate the materials price and usage variance for asphalt. Material price variances should be based on material purchased, since you want to isolate the variance as soon as possible. Material quantity variance should be based on materials used, since this is monitoring the production efficiency. Material Price variance (15,000) F Material quantity variance (9,360) F 2. Calculate the direct labor rate and efficiency variances. Labor rate variance 2,500 U Labor Efficiency variance (12,000) U 3. Variable manufacturing overhead spending and efficiency variances. Variable overhead spending variance 6,200 U Variable overhead efficiency variance (2,000) F 4. Fixed manufacturing overhead spending and volume variances. Fixed Manufacturing overhead spending variance (5,000) F Fixed overhead volume variance 0 F 5. Comment on your variance analysis you performed above. The following information is available regarding the company's actual operations for the period. 1. Material Price Variance is Favorable because the Actual purchase price was less (per pound) than the Standard purchase price. Material Quantity Variance is Favorable because the Actual quantity used was less (per unit) than the Standard quantity needed. 2. Labor Rate Variance is Unfavorable because the Actual rate (per hour of labor) exceeded the Standard rate per hour of labor. Labor Efficiency Variance is Unfavorable because the Actual direct labor hours used were more than the Standard hours allowed, given actual shingle output of 540,000 units. 3. Variable Overhead Spending Variance is Unfavorable because the Actual variable
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Problem 2 Worth 10 pts. Reference chapter 11 and Problem 11-40 and 11-42 Bubble company produces shampoo--Plain Bubble shampoo The company expects to produce and sell 100,000 Bottles The following are the related prime costs of making a bottle Variable rate per each unit Direct material $1.25 Direct Labor $0.98 The following variable and fixed cost pertain to the production of the bottles of shampoo. Overhead item
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mba642_takehomeexam2 - Problem 1 Worth 10 pts. Reference...

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