Question: I need help with these please. Problem 6-32 Stratton, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The
Problem 6-32 Stratton, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows Standard Price $4 per yard 12 per DLH Variable overhead$4 per DLH $6 per DLH Standard Quantity Standard Cost $6.00 6.00 2.00 3.00 $17.00 Direct materials 1.50 yards Direct labor 0.50 DLH 0.50 DLH 0.50 DLH Flxed overhead Sandy Robison, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November The company purchased and used 80,200 yards of fabric during the month. Fabric purchases during the month were made at $3.90 per yard. The direct labor payroll ran $319,725, with an actual hourly rate of $12.25 per direct labor hour. The annual budgets were based on the production of shirts, using 250,000 direct labor hours. Though the budget for November wa based on 50,000 shirts, the company actually produced 52,000 shirts during the month. Variable Overhead Budget Annual Budget Per Shirt November-Actual $0.90 0.60 Indirect material Indirect labor Equipment repair Equipment power $450,000 300,000 200,000 50,000 $49,200 31,400 20,500 6,900 $108,000 5 00,00o 0.10 $1,000,000 $.00 Total Fixed Overhead Budget Annual Budget November-Actual 22,000 Supervisory salaries 260,000
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