Problem 16-59 Find Actual and Budget Amounts from Variances (LO 16-5, 6) me that
ID: 2583642 • Letter: P
Question
Problem 16-59 Find Actual and Budget Amounts from Variances (LO 16-5, 6) me that Timekiller, Inc., manufactures a new eloctronic game console. The current standard costs sheet for a game console follows: Assu Direct materials, ? kilograms at $4 per kilogram Direct labor. 0.25 hours at ? per hour Overhead, 0.25 hours at ? per hour $? per game ? per game ? per game Total costs S 14 per game Assume that the follaowing data appeared in Timekiller's records at tho end of the past month: 32,500 units 32,000 units Actual production Actual salos Materials (43,500 kilograms) $197,400 Materials price variance Materials efficiency variance Direct labor price variance Direct labor (7.400 hours) Underapplied overhead (total)4,700 U 1,500 U 900 U 11,100 U There are no materials inventories. Required: (a) Complote the standard cost sheet for a game console givon below. What was the direct labor variance? (Round kilograms to 2 decimal places. Indicate the effect of each variance by selocting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Direct materiais Direct labor, 0.25 hours at Overhead, 0.25 hours at kilograms at $4 per kilogram per hour per hour per game por game per game $ 14 per game Total costsExplanation / Answer
(a) Material Price Variance = Actual Quantity * (Standard price - Actual Price)
-1500 = 43500 (SP - 197400/43500)
-1500 = 43500 SP - 197400
SP = 4.50
Material Efficiency (usage) Variance = Standard Price * (Standard Quantity for actual output - Actual Quantity)
-900 = 4.50 (SQAO - 43500 )
SQAO = 43300
Standard Quantity per game = 43300 / 32500 = 1.33 Kg (approx)
Direct Labour Price Variance = Actual Hours * (Standard rate - actual rate)
-11100 = 7400* (SR - 129500/7400)
-11100 = 7400 SR - 129500 i.e. SR = 16 per hour
Direct labour efficiency Variance = Standard Rate * (Standard Hours for actual output - Actual Hours)
= 16 * (0.25 * 32500 - 7400) = 11600 (Favourable)
Direct Materials 1.33kg * 4/kg 5.32 per game Direct Labour 0.25 hours * 16 / hour 4 per game Overheads 0.25 hours * 18.72 / hour 4.68 Balancing figure Total costs 14 per game