Augusta Sports manufactures baseball caps. The company uses standards to control costs. The labor standards for one baseball cap are as follows: Standard Hours 15 minutes Standard Rate per Hour $15 per hour The budgeted variable overhead rate is $5 per direct labor hour. During the current month, the company incurred $21,747 in variable manufacturing overhead costs. During the current month, 4,997 direct labor hours were needed to manufacture 20,198 baseball caps. Direct labor costs totaled $102,000 for the month. Compute the variable overhead spending variance. Enter a favorable variance as a positive number. Enter an unfavorable variance as a negative number.
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- Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hoursRulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
- Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per product follow: Budgeted fixed overhead costs for the month are $4,000, and Shinto expected to manufacture 2,000 units. Actual production, however, was only 1,800 units. Materials prices were 10% over standard, and labor rates were 5% over standard. Of the factory overhead expense, only 80% was used, and fixed overhead was $100 over budget. The actual variable overhead cost was $4,800. In materials usage, 8% more parts were used than were allowed for actual production by the standard, and 6% more labor hours were used than were allowed. Required: Calculate the materials and labor variances. Calculate the variances for overhead by the four-variance method. (Hint: First compute the fixed and variable overhead rates per hour.)Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
- Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.Moleno Company produces a single product and uses a standard cost system. The normal production volume is 120,000 units; each unit requires 5 direct labor hours at standard. Overhead is applied on the basis of direct labor hours. The budgeted overhead for the coming year is as follows: At normal volume. During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of 2,150,400 and actual variable overhead costs of 1,422,800. Required: 1. Calculate the standard fixed overhead rate and the standard variable overhead rate. 2. Compute the applied fixed overhead and the applied variable overhead. What is the total fixed overhead variance? Total variable overhead variance? 3. CONCEPTUAL CONNECTION Break down the total fixed overhead variance into a spending variance and a volume variance. Discuss the significance of each. 4. CONCEPTUAL CONNECTION Compute the variable overhead spending and efficiency variances. Discuss the significance of each.National Pottery makes handmade clay pots. The company anticipates $3,187,219 of manufacturing overhead in the coming year. Because it is a labor-intensive organization, National Pottery bases overhead allocation on direct labor cost. The direct labor quantity standard is 2.7 hours per pot, and the standard direct labor rate is $22.50 per hour. The anticipated direct labor cost for the year is $3,375,000. Variable overhead is expected to be $2,162,350. What is the standard fixed overhead cost per pot? Round your answer to the nearest cent. O $23.11 O $6.83 O $38.92 O $18.45
- Augusta Sports manufactures baseball caps. The company uses standards to control costs. The labor standards for one baseball cap are as follows: Standard Hours 15 minutes Standard Rate per Hour $15 per hour The budgeted variable overhead rate is $5 per direct labor hour. During the current month, the company incurred $21,987 in variable manufacturing overhead costs. During the current month, 4,923 direct labor hours were needed to manufacture 19,475 baseball caps. Direct labor costs totaled $102,000 for the month. Compute the variable overhead efficiency variance. Enter a favorable variance as a positive number. Enter an unfavorable variance as a negative number.Erle Company manufactures a moble fitness device called the JoggIng Mate. The company uses standards to control Its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Rate Standard per Hour $6.00 Standard Hours Cost 27 minutes $2.70 During August, 9,690 hours of direct labor time were needed to make 20,000 units of the Jogging Mate. The direct labor cost totaled $56,202 for the month. Requlred: 1. What Is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 20,000 Jogging Mates? 3. What Is the labor spending varlance? 4. What is the labor rate varlance and the labor efficiency varlance? 5. The budgeted varlable manufacturing overhead rate is $4.10 per direct labor-hour. During August, the company Incurred $48,450 in varlable manufacturing overhead cost. Compute the varlable overhead rate and efficiency varlances for the month. (For requlrements 3 through 5, Indicate the…Norwall Company’s variable manufacturing overhead should be $3.00 per standard machine-hour and itsfixed manufacturing overhead should be $300,000 per period.The following information is available for a recent period:a. The denominator activity of 60,000 machine-hours is used to compute the predetermined overhead rate.b. At the 60,000 standard machine-hours level of activity, the company should produce 40,000 unitsof product.c. The company’s actual operating results were:Number of units produced .................................... 42,000Actual machine-hours ........................................... 64,000Actual variable overhead cost .............................. $185,600Actual fixed overhead cost ................................... $302,400Required:1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements.2. Compute the standard hours allowed for the actual production.3. Compute the variable overhead rate and efficiency variances and the…