Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs...
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Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Quantity Standard Cost per Bag Direct Materials 20 kilograms $8.00 Direct Labour 0.1 hours 1.10 Variable Manufacturing Overhead 0.1 hours 40 The company had no beginning inventories of any kind on January 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. The results of the company's operations during January are as follows: Production of Fastgro: 4,000 bags Direct Materials Purchased 85,000 kilograms at a cost of $32,300 Direct Labour Used 390 hours at a cost of $4,875 $1,475 Variable Manufacturing Overhead Incurred Inventory of Direct Materials on January 31 3,000 kilograms Required: a. Calculate all Material, Labour and Variable Overhead variances for Cole. b. Comment on which manager would typically be responsible for each variance. Discuss if you think that manger did a good job compared to budgeted expectations. You may wish to use examples of possible reasons for the variance to illustrate. Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows: Standard Quantity Standard Cost per Bag Direct Materials 20 kilograms $8.00 Direct Labour 0.1 hours 1.10 Variable Manufacturing Overhead 0.1 hours 40 The company had no beginning inventories of any kind on January 1. Variable manufacturing overhead is applied to production on the basis of direct labour hours. The results of the company's operations during January are as follows: Production of Fastgro: 4,000 bags Direct Materials Purchased 85,000 kilograms at a cost of $32,300 Direct Labour Used 390 hours at a cost of $4,875 $1,475 Variable Manufacturing Overhead Incurred Inventory of Direct Materials on January 31 3,000 kilograms Required: a. Calculate all Material, Labour and Variable Overhead variances for Cole. b. Comment on which manager would typically be responsible for each variance. Discuss if you think that manger did a good job compared to budgeted expectations. You may wish to use examples of possible reasons for the variance to illustrate.
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Material cost total variance SQSP AQAP SQ standard quantity f... View the full answer
Related Book For
Business principles and management
ISBN: 978-0538444705
12th edition
Authors: James Burrow, Brad KIleindl, Kenneth Everard
Posted Date:
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