Find Actual and Budget Amounts from Variances
Assume that Time killer, Inc., manufactures a new electronic game console. The current standard costs sheet for a game console follows:
|
Direct materials, ? kilograms at $4 per kilogram |
$ ? per game |
|
Direct labor, 0.75 hours at ? per hour |
? per game |
|
Overhead, 0.75 hours at ? per hour |
? per game |
|
Total costs |
$39 per game |
Assume that the following data appeared in Time killer’s records at the end of the past month:
|
Actual production |
24,000 units |
|
Actual sales |
15,000 units |
|
Materials (112,500 kilograms) |
$472,500 |
|
Materials price variance |
22,500 U |
|
Materials efficiency variance |
18,000 U |
|
Direct labor price variance |
13,680 U |
|
Direct labor (17,100 hours) |
287,280 |
|
Under applied overhead (total) |
9,000 U |
There are no materials inventories.
Required
a. Prepare a variance analysis for direct materials and direct labor and complete the standard cost sheet.
b. Assume that all production overhead is fixed and that the $9,000 under applied is the only overhead variance that can be computed. What are the actual and applied overhead amounts?