Crash! Forgot to do a backup! Hard drive is toast! You have lost a portion of ac
ID: 2468884 • Letter: C
Question
Crash! Forgot to do a backup! Hard drive is toast! You have lost a portion of accounting information from Jordan and Taylor. Admitting your mistake will not only shake their confidence, but might also end your brownie deliveries. They are coming over to discuss variances in a couple hours. The only information available from your calculations are the variances. You don't want to admit the actual values for those calculations are lost!!! You still have the following standards. Selling price to Yumminess at $10 per tin. The cost is $8 per tin, which includes $6 of direct material and $1.50 of direct labor. Direct labor is 1 hour per 100 tins. Annual manufacturing overhead is estimated at $100,000 for the expected sales of 200,000 tins. The breakdown for manufacturing overhead includes 85% of variable costs.1. What is the standard fixed manufacturing overhead cost per tin? 2. The Volume Variance is $750 F. How many units were actually produced during the year? 3. How much is total budgeted fixed manufacturing overhead? 4. The Controllable Variance is $3250 U. What was the total dollar amount for actual manufacturing overhead? 5. What are the total standard hours allowed for actual production? 6. The Labor Quantity Variance is $300 U. How many total actual hours were worked? 7. What is the total standard cost of direct materials for total actual production? 8. Total Material Price Variance is $16,800 U. What was the actual direct material cost for total actual production?
Explanation / Answer
1. Estimated Annual manufacturing Overheads 100000 Less: Variable manufacturing Overheads -85% 85000 Standard Fixed manufacturing overheads 15000 Standard Fixed manufacturing overheads/tin= 15000/200000 ie. 0.075 Standard Fixed manufacturing overheads/Hr.= 15000/2000 ie. 7.5 2.FOH Volume Variance= (Standard Rate* Std. hrs. allowed)-Budgeted FOH 750=(7.5*2000)-x Budgeted FOH x= 14250 750=(0.075*x)-14250 Actual production x= 200000 tins 3. Total budgeted fixed manufacturing overhead= 14250 4.Controllable variance = Actual overhead expense - (budgeted overhead per unit x standard number of units) -3250=x-(100000/200000*200000) Actual OH exp.= 96750 5.Total standard hours allowed for actual production 1 hr.per 100 tins. For 200000 actual tins= 1/100*200000= 2000 Std.hrs. 6. The Labor Quantity Variance is $300 U. How many total actual hours were worked? DL Qty./Efficiency Variance = (Std.hrs. for actual prodn. Actual hrs.) × Std.Rate -300=(2000-Actual hrs)*1.5 Actual hrs. worked =2200 hrs. 7.Total standard cost of direct materials for total actual production 200000*6= 1200000 8. Total Material Price Variance is $16,800 U. Actual direct material cost for total actual production D/M price Variance= (Std. Price for actual prodn.-Actual Price)*Actual Qty. -16800=(6-Actual price)*200000 Actual price= 6.084/tin Total for 200000 tins= 6.084*200000=1216800