The following data were drawn from the records of Kersten
The following data were drawn from the records of Kersten Corporation.
Planned volume for year (static budget) ...... 6,000 units
Standard direct materials cost per unit ...... 3.1 lbs. @ $1.50 per pound
Standard direct labor cost per unit ....... 2 hours @ $4.00 per hour
Total expected fixed overhead costs ...... $28,200
Actual volume for the year (flexible budget) ... 6,300 units
Actual direct materials cost per unit ...... 2.7 lbs. @ $2.00 per pound
Actual direct labor cost per unit ......... 2.3 hrs. @ $3.60 per hour
Total actual fixed overhead costs ....... $22,500

Required
a. Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity.
b. Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
c. Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.
d. Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
e. Calculate the predetermined overhead rate, assuming that Kersten uses the number of units as the allocation base.
f. Calculate the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfavorable (U).
g. Calculate the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfavorable (U).

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help