Manufacturing Cost Variances Problem
Barry’s Boxes manufactures a product with the following standard costs:
Cardboard #1 (0.5 yards @ $0.50 per yard) $ 0.25
Cardboard #2 (3 yards @ $0.80 per yard) 2.40
Cardboard #3 (0.4 yards @ $0.25 per yard) 0.10
Direct labor (0.25 hours @ $12 per hour) 3.00
Factory overhead (0.25 hours @ $22 per hour.
Factory overhead is 2/5 variable
and 3/5 fixed.) 5.50
Total standard cost per unit of output $11.25
Standards are based on normal monthly production of 82,000 units. During the month of
October the following occurred:
Cardboard #1 purchased (41,500 yards @ $0.52 per yard) $ 21,580
Cardboard #2 purchased (261,200 yards @ $0.87 per yard) 227,244
Cardboard #3 purchased (32,800 yards @ $0.29 per yard) 9,512
Cardboard #1 used (40,300 yards)
Cardboard #2 used (276,900 yards)
Cardboard #3 used (34,400 yards)
Direct labor (22,120 hours @ $11.50 per hour) 254,380
Actual variable factory overhead 196,000
Actual fixed factory overhead 295,000
Units produced during October 84,875
Required:
Prepare a variance report including calculations for all material, labor, and overhead
variances and appropriate JEs. Your report should include an analysis of and
recommendations on the variances incurred during October.

Answer rating: 100% (QA)

The company used the following materials in October Cardboar... View the full answer