You work in the accounting department of Frobisher Company, a manufacturing company that produces a popular...

 
 

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You work in the accounting department of Frobisher Company, a manufacturing company that produces a popular consumer product. You typically prepare the variance analysis report and present it to the management committee for their review. Unfortunately, the accounting system has been down and the information you have is incomplete. However, you want to impress the management committee by preparing the variance analysis on a timely basis. You recall that manufacturing overhead cost is applied to production on the basis of direct-labour hours and that all of the materials purchased during the period were used in production. The standard costs for production are presented as follows: Direct materials, 9 kilograms @ $3.00 per kilogram Direct labour, 1.2 direct labour hours @ $15.00 per direct labour hour Variable manufacturing overhead, 1.2 direct labour hours @$3.00 per direct labour hour Fixed manufacturing overhead, 1.2 direct labour hours @$7.00 per direct labour hour $27.00 18.00 3.60 8.40 $57.00 The following table presents the information and analysis that you had generated before the accounting system went down: Total Spending or Budget Price or Quantity or Efficiency Standard Rate Volume Cost $202,500 Variance Variance Variance Variance $3,450F $7,275U Direct materials $4,500U Direct labour $135,000 $10,500U Variable manufacturing overhead $27,000 $650F Fixed manufacturing overhead $63,000 $250F $7,000U In order to be prepared for the management committee meeting, you want to generate the missing variances and also have the necessary "backup" data ready. Required: What were the denominator direct labour hours for the last period? You work in the accounting department of Frobisher Company, a manufacturing company that produces a popular consumer product. You typically prepare the variance analysis report and present it to the management committee for their review. Unfortunately, the accounting system has been down and the information you have is incomplete. However, you want to impress the management committee by preparing the variance analysis on a timely basis. You recall that manufacturing overhead cost is applied to production on the basis of direct-labour hours and that all of the materials purchased during the period were used in production. The standard costs for production are presented as follows: Direct materials, 9 kilograms @ $3.00 per kilogram Direct labour, 1.2 direct labour hours @ $15.00 per direct labour hour Variable manufacturing overhead, 1.2 direct labour hours @$3.00 per direct labour hour Fixed manufacturing overhead, 1.2 direct labour hours @$7.00 per direct labour hour $27.00 18.00 3.60 8.40 $57.00 The following table presents the information and analysis that you had generated before the accounting system went down: Total Spending or Budget Price or Quantity or Efficiency Standard Rate Volume Cost $202,500 Variance Variance Variance Variance $3,450F $7,275U Direct materials $4,500U Direct labour $135,000 $10,500U Variable manufacturing overhead $27,000 $650F Fixed manufacturing overhead $63,000 $250F $7,000U In order to be prepared for the management committee meeting, you want to generate the missing variances and also have the necessary "backup" data ready. Required: What were the denominator direct labour hours for the last period?