Pfeifer Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost

Question:

Pfeifer Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2011, 11,200 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labor hours. All materials purchased were used.


Pfeifer Clothiers is a small company that manufactures tall-men'


Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $49,000, and budgeted variable overhead was $35,000.

Instructions
(a) Compute the total, price, and quantity variances for
(1) Materials and
(2) Labor.
(b) Compute the total overhead variance.
(c) Which of the materials and labor variances should be investigated if management considers a variance of more than 4% from standard to be significant?

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Related Book For  book-img-for-question

Managerial Accounting Tools for business decision making

ISBN: 978-0470477144

5th edition

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

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