Lopes Manufacturing Company uses a standard cost accounting system to account for the manufacture of exhaust fans.

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Lopes Manufacturing Company uses a standard cost accounting system to account for the manufacture of exhaust fans. In July 2012, it accumulates the following data relative to 1,800 units started and finished.

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Manufacturing overhead was applied on the basis of direct labor hours. Normal capacity for the month was 3,400 direct labor hours. At normal capacity, budgeted overhead costs were $20 per labor hour variable and $10 per labor hour fixed. Total budgeted fixed overhead costs were $34,000.Jobs finished during the month were sold for $280,000. Selling and administrative expenses were $25,000.Instructions(a) Compute all of the variances for (1) Direct materials and (2) Direct labor.(b) Compute the total overhead variance.(c) Prepare an income statement for management. Ignore income taxes.

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Accounting Principles

ISBN: 978-0470534793

10th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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