Bonita Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2022, 10,100 suits were produced. The following standard and actual cost data applied to the month of May, when normal capacity was 12,500 direct labor hours. All materials purchased were used. Cost Element Standard (per unit) Actual Direct materials 9 yards at $4.50 per yard $398,025 for 91,500 yards ($4.35 per yard) 1.10 hours at $14.00 per hour $172,944 for 12,010 hours ($14.40 per hour) Direct labor 1.10 hours at $6.20 per hour (fixed $3.70; variable $2.50) $49,900 fixed overhead $37,500 variable overhead Overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $46,250, and budgeted variable overhead was $31,250. (a) Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.) (1) Total materials variance 2$ Materials price variance Materials quantity variance 2$ (2) Total labor variance 2$ Labor price variance $ Labor quantity variance 2$ (b) Compute the total overhead variance. Total overhead variance 2$
Bonita Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2022, 10,100 suits were produced. The following standard and actual cost data applied to the month of May, when normal capacity was 12,500 direct labor hours. All materials purchased were used. Cost Element Standard (per unit) Actual Direct materials 9 yards at $4.50 per yard $398,025 for 91,500 yards ($4.35 per yard) 1.10 hours at $14.00 per hour $172,944 for 12,010 hours ($14.40 per hour) Direct labor 1.10 hours at $6.20 per hour (fixed $3.70; variable $2.50) $49,900 fixed overhead $37,500 variable overhead Overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $46,250, and budgeted variable overhead was $31,250. (a) Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.) (1) Total materials variance 2$ Materials price variance Materials quantity variance 2$ (2) Total labor variance 2$ Labor price variance $ Labor quantity variance 2$ (b) Compute the total overhead variance. Total overhead variance 2$
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Bonita Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost
accounting system. In May 2022, 10,100 suits were produced. The following standard and actual cost data
applied to the month of May, when normal capacity was 12,500 direct labor hours. All materials purchased were
used.
Cost Element
Standard (per unit)
Actual
9 yards at $4.50 per yard
$398,025 for 91,500 yards ($4.35 per
yard)
Direct materials
1.10 hours at $14.00 per hour
$172,944 for 12,010 hours ($14.40 per
hour)
Direct labor
Overhead
1.10 hours at $6.20 per hour (fixed $3.70%;
variable $2.50)
$49,900 fixed overhead
$37,500 variable overhead
Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were
$46,250, and budgeted variable overhead was $31,250.
(a)
Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round per unit values to 2
decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)
(1)
Total materials variance
2$
Materials price variance
$
Materials quantity variance
$
(2)
Total labor variance
2$
Labor price variance
2$
Labor quantity variance
$
(b)
Compute the total overhead variance.
Total overhead variance
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