Question

Anton Company manufactures wooden magazine stands. An accountant for Anton just completed the variance report for the current month. After printing the report, his computer’s hard drive crashed, effectively destroying most of the actual results for the month. All that the accountant remembers is that actual production was 220 stands and that all materials purchased were used in production. The following information is also available:

Current Month: Budgeted Amounts
Budgeted production: 200 magazine stands
Direct materials: Wood
Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 square feet per stand
Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.25 per square foot
Direct labor:
Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 hours per stand
Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10 per hour
Variable overhead (allocated based on direct labor hours):
Rate per labor hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4
Rate per stand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2
Fixed overhead (allocated based on direct labor hours):
Rate per labor hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6
Rate per stand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3
Current Month: Variances
Direct materials price variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33 Unfavorable
Direct materials quantity variance . . . . . . . . . . . . . . . . . . . . . . . . . . . –0–
Direct labor rate variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 Favorable
Direct labor efficiency variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550 Unfavorable
Overhead volume variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Favorable
Overhead spending variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 Unfavorable

Instructions
Using the budget for the current month and the variance report, construct the items below.
a. What was the actual purchase price per square foot of wood?
b. How many labor hours did it actually take to produce each stand?
c. What was the actual wage rate paid per hour?
d. What was actual total overhead for the month?



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  • CreatedApril 17, 2014
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