Problem # $2$: Manufacturing Analysis at TechGadget, Inc.

TechGadget, Inc., renowned for its innovative electronic devices, operates under a standard cost

system to maintain financial control and manufacturing efficiency. The company has provided

excerpts of data concerning its flagship product for a specific accounting period. This data includes

standard costs for materials, labor, and overheads, alongside the variances reported, giving insights

into the company's operational performance.

$1)$ Standard

Quantity or Hours

$(2)$ Standard

Price or Rate Standard Cost$(1)\backslash$times $(2)$

Direct materials............. $6$ pounds $$3$ per pound $$18\mathrm{.}00$

Direct labor.............. $0\mathrm{.}8$ hours $$15$ per hour $12$

Variable manufacturing overhead..... $0\mathrm{.}8$ hours $$3$ per hour $2\mathrm{.}4$

Total standard cost per unit....... $$32\mathrm{.}40$

Variances Reported

Total Standard

Cost$*$ Price or Rate Quantity or Efficiency

Direct materials $................$ $$405,000$ $$6,900$ F $$9,000$ U

Direct labor.. $.......$ $$270,000$ $$14,550$ U $$21,000$ U

Variable manufacturing overhead $$54,000$ $$1,300$ F $$?$ U

$*$Applied to Work in Process during the period

Given that TechGadget applies manufacturing overhead based on direct labor hours, all materials

purchased were utilized during the production process, and the work in process inventories were

negligible.

Required Analysis:

$1.$ Calculate the number of units produced in the last period based on the total standard costs

and unit standard costs.

$2.$ Establish the quantity of direct material purchased and utilized in production, correlating

it with the reported variances.

$3.$ Derive the actual cost per pound of material from the provided variance data and the

standard costs.

$4.$ Determine the total actual direct labor$-$hours worked during the period, utilizing the

standard and actual labor costs.

$5.$ Ascertain the actual direct labor$-$hour rate paid during the analyzed period.

$6.$ Calculate the actual variable manufacturing overhead cost incurred during the period based

on the provided overhead variance