Question: Ice Box Gourmet Inc produces containers of frozen food During

Ice Box Gourmet, Inc., produces containers of frozen food. During April, The Company produced 725 cases of food and incurred the following actual costs.
Variable overhead....................................................................... $ 5,500
Fixed overhead............................................................................ 13,000
Actual labor cost (4,000 direct-labor hours)................................ 75,600
Actual material cost (15,000 pounds purchased and used)......... 33,000

Overhead is budgeted and applied using direct-labor hours. Standard cost and annual budget information are as follows:
Standard Costs per Case
Direct labor (5 hours at $18)............................................ $ 90.00
Direct material (20 pounds at $2).................................... 40.00
Variable overhead (5 hours at $1.50).............................. 7.50
Fixed overhead (5 hours at $3)........................................ 15.00
Total................................................................................. $152.50
Annual Budget Information
Variable overhead............................................................ $ 75,000
Fixed overhead................................................................. $150,000
Planned activity for year.................................................. 50,000 direct-labor hours

Required:
1. Prepare as complete an analysis of cost variances as is possible from the available data.
2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the standard rates were $17.50 per hour for direct labor, and $1.60 per direct-labor hour for variable overhead.




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  • CreatedApril 22, 2014
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