16-121
Standard wage rate
$14.70
per DLH
Standard hours
2.4
DLHs per unit
Actual wage rate
$14.80
per DLH
Actual hours
5,990
DLHs
Actual output
2,600
units
DLHs*])
136.
The Norris Company uses a standard cost accounting system and estimates production for
the year to be 60,000 units. At this volume, the company’s variable overhead costs are
$0.50 per direct labor hour.
The company’s single product has a standard cost of $30.00 per unit. Included in the
$30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours).
Production information for the month of March follows:
6,000
$88,800
16-122
18,500
$75,400
Material price variance
Material efficiency variance
Accounts payable
Direct labor rate variance
Direct labor efficiency variance
Wages payable
137.
Darren Company adopted a standard cost system several years ago. The standard costs
for the prime costs of its single product are as follows:
Material: 8 kilograms @ $5 per kilogram
$40.00
Labor: 6 hours @ $8.20 per hour
$49.20
16-123
The following operating data were taken from the records for November:
Units completed
5,600 units
Budgeted output
6,000 units
Purchase of materials
50,000 kilograms
Total actual labor costs
$300,760
Actual labor hours
36,500 hours
Material efficiency (quantity)
variance
$1,500
unfavorable
Total material variance
$750 unfavorable
Material efficiency variance
Material price variance
Accounts payable
16-125
138.
The Fox Company uses a standard cost accounting system and estimates production for
the year to be 60,000 units. At this volume, the company’s variable overhead costs are
$0.50 per direct labor hour.
The company’s single product has a standard cost of $30.00 per unit. Included in the
$30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours).
Production information for the month of March follows:
6,000
$88,800
18,500
$6,380
$20,400
$75,400
Required:
Prepare the journal entries to record the following:
a. Incurring actual overhead.
b. Application of overhead to production.
c. Closing of overhead accounts and recognizing variances.
d. Transferring production to finished goods.
Variable overhead (actual)
Fixed overhead (actual)
Miscellaneous accounts
16-126
139.
The Morroco Company uses a standard cost accounting system and estimates production
for the year to be 60,000 units. At this volume, the company’s variable overhead costs are
$0.50 per direct labor hour.
The company’s single product has a standard cost of $30.00 per unit. Included in the
$30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours).
Production information for the month of March follows:
16-127
4,500
$61,600
13,300
$4,380
$20,400
$57,750
Required:
Prepare the journal entries to record the following:
a. Purchase and use of direct materials (Assume materials are used as purchased and no
inventory is maintained).
b. Recognition of direct labor.
c. Incurring actual overhead.
d. Application of overhead to production.
e. Closing of overhead accounts and recognizing variances.
f. Transferring production to finished goods.
Material price variance
Accounts payable
Direct labor rate variance
140.
141.
142.
143.
16-132
144.
145.
The Tennison Company uses a standard cost system in which manufacturing overhead
costs are applied to units of the company’s single product on the basis of standard direct
labor-hours (DLHs). The standard cost card for the product follows:
Standard Cost Card-per unit of product
Direct Materials, 4 yards at $3.50 per yard
$14
Direct Labor, 1.5 DLHs at $8 per DLH
12
Variable Overhead, 1.5 DLHs at $2 per DLH
3
Fixed Overhead, 1.5 DLHs at $6 per DLH
9
Standard cost per unit
$38
The following data pertain to last year’s activities:
•
The company manufactured 18,000 units of product during the year. A total of 70,200 yards of mat
•
The company worked 29,250 direct labor-hours during the year at a cost of $7.80 per hour.
•
The denominator activity level was 22,500 direct labor-hours.
•
Budgeted fixed manufacturing overhead costs were $135,000 while actual manufacturing overhea
•
Actual variable overhead costs were $61,425.
Required:
a. Compute the direct materials price and quantity variances for the year.
b. Compute the direct labor rate and efficiency variances for the year.
c. Compute the variable overhead rate and efficiency variances for the year.
16-133
16-135
146.
Angie Manufacturing uses a standard cost system in which manufacturing overhead is
applied to units of product on the basis of standard machine-hours. At standard, each unit
of product requires one machine-hour to complete. The standard variable overhead is
$1.75 per machine-hour and Budgeted Fixed Manufacturing Costs are $300,000 per year.
The denominator level of activity is 150,000 machine-hours, or 150,000 units. Actual data
for the year were as follows:
Actual variable overhead cost
$211,680
Actual fixed manufacturing overhead
cost
$315,000
Actual machine-hours
126,000
Units produced
120,000
16-137
147.
Upton Company uses a standard cost system for its single product. The following data are
available:
Actual experience for the current year:
Purchases of raw materials (15,000
yards at $13 per yard)
$195,000
Raw materials used
12,000
yards
Direct labor costs (10,200 hours at
$10 per hour)
$102,000
Actual variable overhead cost
$84,150
Units produced
12,600
units
Standards per unit of product:
Raw materials
1.1 yards at $15 per yard
Direct labor
0.80 hours at $9.50 per hour
Variable overhead
$8 per direct labor hour