Kudos Company has set the following standard costs per unit for the product it manufactures. Direct materials

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Kudos Company has set the following standard costs per unit for the product it manufactures.

Direct materials (10 Ibs. @ $3 per Ib.). . . . . . . . . . . $30.00

Direct labor (4 hrs. @ $6 per hr.) . . . . . . . . . . . . . 24.00

Overhead (4 hrs. @ $2.50 per hr.) . . . . . . . . . . . . . 10.00

Total standard cost . . . . . . . . . . . . . . . . . . . . . . . . . $ 64.00


The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 10,000 units per month. The following flexible budget information is available.


Kudos Company has set the following standard costs per unit


Kudos Company has set the following standard costs per unit


During May, the company operated at 90% of capacity and produced 9,000 units, incurring the following actual costs.

Kudos Company has set the following standard costs per unit


Required
1. Compute the direct materials variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.
3. Compute these variances:
(a) Variable overhead spending and efficiency,
(b) Fixed overhead spending and volume, and
(c) Total overhead controllable.
4. Prepare a detailed overhead variance report that shows the variances for individual items ofoverhead.

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Related Book For  book-img-for-question

Fundamental Accounting Principles

ISBN: 978-0078110870

20th Edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

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