But its obvious our costs are well under control

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stimulate output. But it’s obvious our costs are well under control.”There was no inventory of materials on hand to start the year. During the year, 32,000 feet of materials were purchased and used in production.Required:1.For direct materials: 1.Compute the price and quantity variances for the year.2.Prepare journal entries to record all activity relating to direct materials for the year.
2.For direct labor: 1.Compute the rate and efficiency variances.2.Prepare a journal entry to record the incurrence of direct labor cost for the year.3.Compute the variable overhead rate and efficiency variances.4.Was the president correct in his statement that “our costs are well under control”? Explain.5.State possible causes of each variance that you have computed.Page 475PROBLEM 10B–4 Comprehensive Variance Analysis with Incomplete Data; Journal Entries [LO10–1,LO10–2,LO10–3,LO10–5]Maple Products, Ltd., manufactures a super-strong hockey stick. The standard cost of one hockey stick is: dStandard Quantityor HoursStandard Priceor RateStandardCostDirect materials.....? feet$3.00 per foot$ ?Direct labor.....2 hours? per hourVariable manufacturing overhead.....? hours$1.30 per hour ? Total standard cost.....$27.00Last year, 8,000 hockey sticks were produced and sold. Selected cost data relating to last year’s operations follow:
dDr.Cr.Accounts payable—direct materials purchased (60,000 feet).....$174,000Wages payable (? hours).....$79,200*Work in process—direct materials.....$115,200Labor rate variance.....$3,300Variable overhead efficiency variance.....$650The following additional information is available for last year’s operations:1.No materials were on hand at the start of last year. Some of the materials purchased during the year were still on hand in the warehouse at the end of the year.2.The variable manufacturing overhead rate is based on direct labor-hours. Total actual variable manufacturing overhead cost for last year was $19,800.3.Actual direct materials usage for last year exceeded the standard by 0.2 feet per stick.Required:1.For direct materials: 1.Compute the price and quantity variances for last year.2.Prepare journal entries to record all activities relating to direct materials for last year.2.For direct labor: 1.Using the rate variance given above, calculate the standard hourly wage rate and compute the efficiency variance for last year.2.Prepare a journal entry to record activity relating to direct labor for last year.
3.Compute the variable overhead rate variance for last year and verify the variable overhead efficiency variance given above.4.State possible causes of each variance that you have computed.5.Prepare a standard cost card for one hockey stick.CASE 10B–5 Ethics and the Manager; Rigging Standards [LO10–5]Stacy Cummins, the newly hired controller at Merced Home Products, Inc., was disturbed by what she had discovered about the standard costs at the Home Security Division. In looking over the past several years of quarterly income statements at the Home Security Division, she noticed that the first-quarter profits were always

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