Question

Refer to the Johnson data in Short Exercises S23- 6, S23- 7, and S23- 9.
Exercises S23- 6
Johnson, Inc. is a manufacturer of lead crystal glasses. The standard direct ­materials quantity is 0.8 pound per glass at a cost of $ 0.30 per pound. The actual result for one month’s production of 6,900 glasses was 1.1 pounds per glass, at a cost of $ 0.40 per pound. Calculate the direct materials cost variance and the direct ­materials efficiency variance.

Exercises S23- 7
Johnson, Inc. manufactures lead crystal glasses. The standard direct labor time is 0.3 hours per glass, at a cost of $ 13 per hour. The actual results for one month’s production of 6,900 glasses were 0.2 hours per glass, at a cost of $ 10 per hour. Calculate the direct labor cost variance and the direct labor efficiency variance.

Exercises S23- 9
Static budget variable overhead ....... $ 9,000
Static budget fixed overhead ......... $ 4,500
Static budget direct labor hours ........ 1,800 hours
Static budget number of glasses ......... 6,000 glasses

Requirements
1. Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
2. Explain why the variances are favorable or unfavorable.



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  • CreatedJanuary 16, 2015
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