Special order lamps are manufactured in division S. Because of the precise nature of the process a
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Special order lamps are manufactured in division S. Because of the precise nature of the process a | |||||||
standard cost system has been developed. The following standards are used for the special orders: | |||||||
Standards | |||||||
Lamp Kits | $16.000000 | per lamp | |||||
Direct Labor | 2.400000 | per lamp (4 lamps/hr.) | |||||
Variable Overhead | 0.250000 | per lamp (4 lamps/hr.) | |||||
** | Fixed Overhead | 10.000000 | per lamp | ||||
Total | $28.650000 | ||||||
** Fixed overhead is based on expected production of 4,008 customized lamps each month. | |||||||
To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries | |||||||
are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) | |||||||
while entries are made to the accounting system at standard. Variance analysis is used to analyze the | |||||||
differences. | |||||||
Job Order Costing Section | |||||||
On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The | |||||||
job called for 4,000 customized lamps. The following set of transactions occurred from | |||||||
January 5 until the job was completed: | |||||||
5-Jan | Purchased 4,150 Lamp Kits @ $16.30 per kit. | ||||||
9-Jan | 4,200 sets of Lamp Kits were requisitioned. | ||||||
17-Jan | Payroll of 600 Direct Labor Hours @ $9.50 per hour. | ||||||
30-Jan | Payroll of 650 Direct Labor Hours @ $9.75 per hour. | ||||||
30-Jan | 3,992 lamps were completed and shipped. All materials requisitioned were | ||||||
used or scrapped. | |||||||
Month End Overhead Information | |||||||
Actual Variable Overhead | $1,275.00 | ||||||
Actual Fixed Overhead | $40,373.45 | -- |
How many lamps were completed?
What was the total material price variance for the Lamp kits purchased?
What was the material usage variance for Lamp Kits?
What was the direct labor efficiency variance?
What was the direct labor rate variance?
What was the variable overhead efficiency variance?
What was the variable overhead spending variance?
What is the fixed overhead volume (denominator) variance?
What was the fixed overhead spending variance?
Related Book For
Accounting for Decision Making and Control
ISBN: 978-0078025747
8th edition
Authors: Jerold Zimmerman
Posted Date: