Problem 16-59 Find Actual and Budget Amounts from Variances (LO 16-5, 6) Assume
ID: 2583854 • Letter: P
Question
Problem 16-59 Find Actual and Budget Amounts from Variances (LO 16-5, 6)
Assume that Timekiller, Inc., manufactures a new electronic game console. The current standard costs sheet for a game console follows:
Complete the standard cost sheet for a game console given below. What was the direct labor efficiency variance? (Round kilograms to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Assume that all production overhead is fixed and that the $3,900 underapplied is the only overhead variance that can be computed. What are the actual and applied overhead amounts?
Assume that Timekiller, Inc., manufactures a new electronic game console. The current standard costs sheet for a game console follows:
Explanation / Answer
1)Material efficiency variance =SR[AQ-SQ]
26500 = 5[45500-SQ]
26500/5 = 45500-SQ
SQ = 45500-5300
= 40200
Standard quantity per unit produced = 40200/33500 = 1.2 Kg per unit
standard material cost per unit = 1.2* 5=6 per game
2)Labor price variance =Actual cost - [AH*sr]
36190 = 128590- [7700 *SR]
7700*SR = 128590-36190
SR = 92400 /7700
= $ 12 Per hour
standard cost per game = 12*.25 =$ 3 per game
3)overhead cost per game =Total cost per game -material cost per game -labor cost per game
= 12-6-3
= $ 3
overhead cost per hour = 3/.25 = $ 12
a)
Labor efficiency variance =SR[AH-SH]
= 12 [7700- (33500*.25)]
= 12 [7700- 8375]
= -8100 F
B)Applied overhead =Actual quantity produced *Standard cost per unit
= 33500* 3
= $ 100500
Actual overhead : APplied overhead +underapplied overhead
= 100500+3900
= $ 104400
Direct material 1.2 kg at $ 5 6 Direct labor .25hours at $12 3 Overhead .25 hours at $ 12 3 Total cost 12