Variable manufacturing overhead efficiency variance

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Variable Manufacturing Overhead Efficiency Variance14171Fixed Manufacturing Overhead Production-Volume Variancec31190Variable Manufacturing Overhead Spending Variance3062Fixed Manufacturing Overhead Spending Variance5055Cost of Goods Sold37244
Sheet8Page 8P8-34Sharon Faith's Art Supply Company produces various types of paints. Actual direct manufacturing labor hours in the factor that produces paint that havebeen higher than budgeted hours for the last few months and the owner, Sharon F. Johnson, is concerned about the effect this has had on the company'scost overruns. Because variable manufacturing overhead is allocated to units produced using direct manufacturing labor hours, Sharon feels that themismanagement of labor will have a twofold effect on company profitability. Following are the relevant budgeted and actual results for the second quarter of2011Budget InformationActual ResultsPaint set production2200038000Direct manuf. Labor hours per paint set22.4Direct manufacturing labor rate8/hour10.1/hourVariable manufacturing overhead rate22/hour17.95/hourActual CostActual InputFlexibleDirect Manuf. Labor921120729600608000Price VarianceEfficiency VDirect Manuf. Labor191520U121600URequirement 2Actual CostActual InputFlexibleVariable OH163704020064001672000Price VarianceEfficiency VVariable OH369360F334400URequirement 3FAVORABLELESSCOULDHIGHERFAVORABLERequirement 4MAY BEINFLATELOWERFAVORABLE
Sheet9P8-39The Bartlett Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturingoverhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor hours(DLH). The following information is available regarding the standards adopted and actual records for January:At the beginning of 2012, Bartlett adopted the following standards for its manufacturingThe denominator level for total manufacturing overhead per month in 2012 is45000 directcosts:manufacturing labor-hours. Bartlett's flexible budget for January 2012 was based on thisInputCost per Output unitdemoninator level. The records for January indicated the following:Direct materials4624Direct manufacturing labor718126Direct materials purchased315005.8Manufacturing overhead:Direct materials used30000Variable856Direct manufacturing labor4980017.75Fixed1070Total actual manufacturing overhead (variable and fixed)625000Standard manufacturing cost per output unit276Actual production7400Requirements:1. Prepare a schedule of total standard manufacturing costs for 7400 output units in January 2012.2. For the month of January 2012, compute the listed variances, indicating whether each is favorable (f) or unfavorable (u).Page 9Requirement 1Direct materials177600Direct manufacturing labor932400Manufacturing overhead:Variable414400Fixed518000Total2042400Requirement 2Actual input Qty x budgetActual CostPurchasesUsageFlexibleDirect materials182700189000180000177600a.6300Fb.2400UActual CostActual InputFlexibleDirect Manuf. Labor883950896400932400c.12450Fd.36000FActual CostActual InputFlexibleAllocated OH

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