Kieffer Company makes mens suit alterations for a major clothing store chain. No direct materials are used
Question:
Expected direct labor hours (DLHs; to be incurred
evenly throughout the year) .......... 60,000
Number of suits altered in October .......... 1,800
Standard DLHs per suit .............. 3
Actual DLHs worked in October 2010 ........ 5,490
Budgeted variable conversion cost per DLH ....... $18
Budgeted annual fixed conversion cost ....... $72,000
Actual variable conversion cost for October 2010 ...$103,100
Actual fixed conversion cost for October 2010 ..... $5,750
a. How many suits does Kieffer Company expect to alter during 2010?
b. What is the predetermined fixed OH rate for Kieffer Company?
c. How many standard direct labor hours were allowed for October 2010?
d. Calculate the four conversion cost variances assuming that variable and fixed costs are separated.
e. Calculate the three conversion cost variances assuming that fixed and variable costs are combined.
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Related Book For
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn
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