HearSmart manufactures headphone cases. During September 2012, the company produced and sold 107,000 cases and recorded the
Question:
HearSmart manufactures headphone cases. During September 2012, the company produced and sold 107,000 cases and recorded the following cost data:
Requirements
1. Compute the price and efficiency variances for direct materials and direct labor.
2. For manufacturing overhead, compute the variable overhead spending and efficiency variances and the fixed overhead spending and volume variances.
3. HearSmart's management used better quality materials during September. Discuss the trade-off between the two direct materialvariances.
Transcribed Image Text:
Standard Cost Information: Quantity Price $ 0.16 per part $ 8.00 per hour $ 9.00 per hour Dircct materials 2 parts 0.02 hours Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($32,980 for static budget volume of 97,000 units and 1,940 hours, or $17 per hour) 0.02 hours Actual Information: Direct materials (210,000 parts @ $0.21 per part = $44,100) Direct labor (1,640 hours @ $8.15 per hour = $13,366) Variable manufacturing overhcad $8,000 Fixed manufacturing overhead $30,000
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
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