Cartier Co manufactures wooden toy vehicles. The company operates a standard costing system and values inventory at
Question:
Cartier Co manufactures wooden toy vehicles. The company operates a standard costing
system and values inventory at standard cost.
The following is an extract of a partly completed spreadsheet for calculating variances in Dec
2021.
Standard Cost Card - Toy Vehicle $ per vehicle
Selling price 250
Direct material 5 kgs per unit @ $7 35
Direct labour 6 hours @ $12 per hour 72
Total production overhead
Variable production ovorhead 6 hours @ $5 per DLH 30
Fixed production overhead 6 hours @ $3 per DLH 18
Actual and budgeted activity levels in units
Budget Actual
Sales 25,000 25,600
Production 25,000 26,000
Actual sales revenue and variables costs $
Sales 6,266,880
Direct material purchased (150,000 kgs) 1,125,000
Direct labour (150,000 hours) 1,920,000
Variable production overhead 832,000
Fixed production overhead 440,000
Additional information:
Annual budgeted production capacity 300,000 units
The standard production overhead costs per unit is based on direct labour hours.
Based on capacity of 200,000 direct labour hours per month.
Direct material used 128,000 kgs
Required:
(a)
Calculate the following variances for Dec 2021 and state whether it is favourable or
unfavourable:
i)
Total direct material variances
ii)
Total direct labour variances
iii)
Total variable overhead variances
iv)
Total fixed overhead variances
Expert Answer:
Lets calculate the variances for December 2021 a i Total Direct Material Variances Direct Material P... View the full answer
