24 c 427878

Aug 29, 2021 | Uncategorized

Tuna Company set the following standard unit costs for its single product.
Direct materials (28 Ibs. @ $5 per Ib.) $ 140.00
Direct labor (10 hrs. @ $10 per hr.) 100.00
Factory overhead”variable (10 hrs. @ $6 per hr.) 60.00
Factory overhead”fixed (10 hrs. @ $9 per hr.) 90.00
Total standard cost $ 390.00

The predetermined overhead rate is based on a planned operating volume of 70% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available.

Operating Levels
60% 70% 80%
Production in units 36,000 42,000 48,000
Standard direct labor hours 360,000 420,000 480,000
Budgeted overhead
Fixed factory overhead $ 3,780,000 $ 3,780,000 $ 3,780,000
Variable factory overhead $ 2,160,000 $ 2,520,000 $ 2,880,000

During the current quarter, the company operated at 80% of capacity and produced 48,000 units of product; actual direct labor totaled 477,000 hours. Units produced were assigned the following standard costs:

Direct materials (1,344,000 Ibs. @ $5 per Ib.) $ 6,720,000
Direct labor (480,000 hrs. @ $10 per hr.) 4,800,000
Factory overhead (480,000 hrs. @ $15 per hr.) 7,200,000
Total standard cost $ 18,720,000

Actual costs incurred during the current quarter follow:

Direct materials (1,339,000 Ibs. @ $5.10) $ 6,828,900
Direct labor (477,000 hrs. @ $9.75) 4,650,750
Fixed factory overhead costs 4,230,000
Variable factory overhead costs 3,960,000
Total actual costs $ 19,669,650

value:
1.00 points

Required:
1.

Compute the direct materials cost variance, including its price and quantity variances. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank be certain to enter “0” wherever required. Omit the “$” sign in your response.)

Direct materials cost variance $ (Click to select)UNoneF
Price variance $ (Click to select)FNoneU
Quantity variance $ (Click to select)NoneUF

eBook Links (2)references

2. value:
1.00 points

2.

Compute the direct labor variance, including its rate and efficiency variances. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank be certain to enter “0” wherever required. Omit the “$” sign in your response.)

Direct labor cost variance $ (Click to select)UNoneF
Rate variance $ (Click to select)UFNone
Efficiency variance $ (Click to select)NoneFU

eBook Links (2)references

3. value:
1.00 points

3.

Compute the overhead controllable and volume variances. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank be certain to enter “0” wherever required. Omit the “$” sign in your response.)

Controllable variance $ (Click to select)UFNone
Fixed overhead volume variance $ (Click to select)FNoneU