Koontz Company manufactures a number of products. The standards relating to one of these products are...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Direct materials: Standard: 1.80 feet at $1.00 per foot Actual: 1.75 feet at $1.40 per foot Direct labor: Standard: 0.90 hours at $15.00 per hour Actual: 0.95 hours at $14.60 per hour Variable overhead: Standard: 0.90 hours at $6.00 per hour Actual: 0.95 hours at $5.60 per hour Total cost per unit Excess of actual cost over standard cost per unit Standard Cost per Unit $ 1.80 13.50 5.40 $ 20.70 $ 0.94 Actual Cost per Unit $ 2.45 13.87 5.32 $ 21.64 The production superintendent was pleased when he saw this report and commented: "This $0.94 excess cost is well within the 5 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product." Actual production for the month was 10,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Compute the following variances for May: a b. c. Materials price and quantity variances. Labor rate and efficiency variances. Variable overhead rate and efficiency variances. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. 2. 3. How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor time? a. Compute the following variances for May, materials price and quantity variances. 1b. Compute the following variances for May, labor rate and efficiency variances. 1c. Compute the following variances for May, variable overhead rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect zero variance). Input all amounts as positive values. Round your answers to 2 decimal places. Materials: Price variance 1a. Materials price variance 1a. Materials quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency variance Quantity variance abor: Rate variance Efficiency variance Variable overhead: 0.00 0.00 Rate variance Efficiency variance 0.00 Excess of actual over standard cost per unit $ 0.00 How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor timer Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round your final answers to 2 decimal places. Excess of actual over standard cost per unit Less portion attributable to labor inefficiency: Labor efficiency variance Variable overhead efficiency variance Portion due to other variances 0.00 $ 0.00 Show less A Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Direct materials: Standard: 1.80 feet at $1.00 per foot Actual: 1.75 feet at $1.40 per foot Direct labor: Standard: 0.90 hours at $15.00 per hour Actual: 0.95 hours at $14.60 per hour Variable overhead: Standard: 0.90 hours at $6.00 per hour Actual: 0.95 hours at $5.60 per hour Total cost per unit Excess of actual cost over standard cost per unit Standard Cost per Unit $ 1.80 13.50 5.40 $ 20.70 $ 0.94 Actual Cost per Unit $ 2.45 13.87 5.32 $ 21.64 The production superintendent was pleased when he saw this report and commented: "This $0.94 excess cost is well within the 5 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product." Actual production for the month was 10,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Compute the following variances for May: a b. c. Materials price and quantity variances. Labor rate and efficiency variances. Variable overhead rate and efficiency variances. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. 2. 3. How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor time? a. Compute the following variances for May, materials price and quantity variances. 1b. Compute the following variances for May, labor rate and efficiency variances. 1c. Compute the following variances for May, variable overhead rate and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. How much of the $0.94 excess unit cost is traceable to each of the variances computed in requirement 1. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect zero variance). Input all amounts as positive values. Round your answers to 2 decimal places. Materials: Price variance 1a. Materials price variance 1a. Materials quantity variance 1b. Labor rate variance 1b. Labor efficiency variance 1c. Variable overhead rate variance 1c. Variable overhead efficiency variance Quantity variance abor: Rate variance Efficiency variance Variable overhead: 0.00 0.00 Rate variance Efficiency variance 0.00 Excess of actual over standard cost per unit $ 0.00 How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor timer Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round your final answers to 2 decimal places. Excess of actual over standard cost per unit Less portion attributable to labor inefficiency: Labor efficiency variance Variable overhead efficiency variance Portion due to other variances 0.00 $ 0.00 Show less A
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-0078111006
14th edition
Authors: Ray Garrison, Eric Noreen and Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Shashin has 4P dollars that he wants to invest in a savings account earning an interest rate of r at the end of every two weeks. Nimish suggests an alternative: that Shashin instead open four...
-
The American Society for Quality (ASQ) conducted a salary survey of all its members. ASQ members work in all areas of manufacturing and service-related institutions, with a common theme of an...
-
On what interval is the curve concave downward? dt
-
Sure Tool Company is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. Analysts expect the price of...
-
Water flows from a large tank through a large pipe that splits into two smaller pipes as shown in Fig. P3.113. If viscous effects are negligible, determine the flowrate from the tank and the pressure...
-
At the time of his death this year on September 4, Kenneth owned the following assets. Fair Market Value City of Boston bonds $2,500,000 Stock in Brown Corporation 900,000 Promissory note issued by...
-
Pharoah Company entered into these transactions during May 2025, its first month of operations. 1. Stockholders invested $44,500 in the business in exchange for common stock of the company. 2....
-
Super Seniors is a not-for-profit organization that provides services to senior citizens. Super employs a full-time staff of 10 people at an annual cost of $150,000. In addition, two volunteers work...
-
The budget director of Heather's Florist has prepared the following sales budget. The company had $132,600 in accounts receivable on July 1. Heather's Florist normally collects 100 percent of...
-
Solve the equation. 3+p= 7- 32-P V
-
As a bookkeeper or accounting professional, it is crucial to have a comprehensive understanding of the general journal and the process of entering correcting entries, as well as the principles for...
-
Mickley Company's plantwide predetermined overhead rate is $21.00 per direct labor-hour and its direct labor wage rate is $13.00 per hour. The following information pertains to Job A-500: Direct...
-
You have the following data: Cost of goods sold $70 Direct labour $20 Direct materials $15 Cost of goods manufactured $80 Work-in-process ending $10 Finished goods ending $15 Manufacturing overhead...
-
When would the 5 elements of Statement of Professional Practice apply? Give at least one example for each area.
-
Simplify the expression. Assume that all variables are positive. 23VI1 2 V44 8
-
Define family law and identify the kinds of issues that are addressed in a family law practice.
-
Describe the role of a paralegal in a family law practice.
-
Identify the kinds of resources included in a basic family law library.
Study smarter with the SolutionInn App