Simpson Manufacturing has the following standard cost sheet based on a budgeted volume of 350 units. Total
Question:
Simpson Manufacturing has the following standard cost sheet based on a budgeted volume of 350 units.
Total | ||
Direct materials | 5 pounds at $2 per pound | $10 |
Direct labor | 2 hours at $25 per hour | 50 |
Variable factory overhead | 2 hours at $5 per hour | 10 |
Fixed factory overhead | 2 hours at $20 per hour | 40 |
Cost per unit | $110 |
The company uses a standard cost system and applies factory overhead based on direct labor hours.
Simpson has the following actual operating results for the year just completed:
Units manufactured 360
Direct materials purchased and used 1,872 pounds $20,592
Direct labor incurred 750 hours 20,250
Variable factory overhead incurred 4,800
Fixed factory overhead incurred 15,800
Prepare the five column flexible budget report.
Prepare the variance analysis for direct material, direct labor, variable and fixed manufacturing overhead.
Cost Management Measuring, Monitoring and Motivating Performance
ISBN: 978-1119185697
3rd Canadian edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang-Hsuan Chen, Gail Cook