Chapter 13 Determine the standard direct materials and direct labor

subject Type Homework Help
subject Pages 9
subject Words 1242
subject Authors Carl S. Warren

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415
E13–24
Rate variance:
Direct Labor Rate Variance = (Actual Rate per Hour – Standard Rate per Hour)
× Actual Hours
Total direct labor cost variance:
Direct Labor Cost Variance = Direct Labor Rate Variance + Direct Labor Time
Variance
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E13–25
Step 1: Determine the standard direct materials and direct labor per unit.
Standard direct materials quantity per unit:
Direct materials lbs. budgeted for August:
lb. per $0.40
$15,000 = 37,500 lbs.
Step 2: Using the standard quantity and time rates from Step 1, determine the
standard costs for the actual August production.
Standard direct materials at actual volume: 24,500
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E13–25, Concluded
Step 4: Determine the total variance, assuming no direct materials price or direct
labor rate variances.
E13–26
b. Standard time used for the volume of admissions:
Unscheduled Scheduled Total
c. Actual minutes used (2 employees × 36 hrs. × 60 min.) .......... 4,320
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Appendix: E13–27
Variable factory overhead controllable variance:
Alternative Computation of Overhead Variances
Factory Overhead
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Appendix: E13–28
a. Controllable variance:
Actual variable factory overhead
b. Volume variance:
Volume at 100% of normal capacity ............... 60,000
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Appendix: E13–28, Concluded
Alternative Computation of Overhead Variances
Factory Overhead
Actual costs $ 1,428,000
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Appendix: E13–29
Fixed factory overhead volume variance:
Alternative Computation of Overhead Variances
Factory Overhead
Actual costs ($600,000 + $325,000) $925,000
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Appendix: E13–30
A B C D E
1 TOPEKA PLASTICS INC.
2 Factory Overhead Cost Variance Report—Trim Department
3 For the Month Ended July 31
4 Productive capacity for the month 30,000 hrs.
10 Variable factory overhead cost:*
11 Indirect factory labor $ 23,250 $ 22,400 $ 850
*The budgeted variable factory overhead costs are determined by multiplying
28,000 hours by the variable factory overhead cost rate for each variable cost
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Appendix: E13–30, Concluded
Alternative Computation of Overhead Variances
Factory Overhead
Actual costs $148,850
Actual Factory Budgeted Factory Applied Factory
Overhead Overhead for Amount Overhead
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PROBLEMS
P13–1
1.
A B C D
1 ROYAL BRITISH FURNITURE COMPANY
2 Sales Budget
3 For the Month Ending March 31
Unit Sales Unit Selling
4 Product and Area Volume Price Total Sales
5 William:
6 Eastern Domestic 7,500 $800 $ 6,000,000
2.
A B C
1 ROYAL BRITISH FURNITURE COMPANY
2 Production Budget
3 For the Month Ending March 31
4 Units
5 William Kate
6 Expected units to be sold 16,000 12,000

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