The BC Division of Cooks Company produces small kitchen appliances. The company uses a standard cost...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The BC Division of Cooks Company produces small kitchen appliances. The company uses a standard cost system for production costing and control. The standard cost sheet for its most popular product, a toaster, is given below: Direct Materials (2.5 lbs. @ $4.00per pound) $10.00 Direct Labor (0.7 hr @ $10.50 per hour) $7.35 Variable Overhead (0.7 hr @ $6.00 per hour) $4.20 Fixed Overhead (0.7 hr @ $3.00 per hour) $2.10 Standard cost per unit $23.65 During the year, the BC experienced the following activity relative to the production of toasters: a) Production of toasters totaled 50,000 units. b) A total of 130,000 pounds of materials was purchased at $3.70 per pound. c) There were 10,000 pounds of raw materials in beginning inventory (carried at $4 per pound). There was no ending inventory. d) The company used 36,500 direct labor hours at a total cost of $392,375. e) Actual fixed overhead totaled $95,000. 1) Actual variable overhead totaled $210,000. I The BC produces all of its toasters in a single plant. Standard overhead rates are computed based on normal activity measured in standard direct labor hours. The company has a $10,500 favorable production volume variance. Material price variances are isolated as soon as possible. Required: a) Compute the materials price and efficiency variances. (4 Marks) b) Compute the labor price and efficiency variances. (4 Marks) c) Compute the overhead variances using the four way analysis. (8 Marks) d) What is the denominator level that was used to determine the fixed overhead rate. Give your answer in units and in direct labor hours. (2 Marks) e) Give the journal entry to record the variances calculated in a), b) and c) above (10 Marks) The BC Division of Cooks Company produces small kitchen appliances. The company uses a standard cost system for production costing and control. The standard cost sheet for its most popular product, a toaster, is given below: Direct Materials (2.5 lbs. @ $4.00per pound) $10.00 Direct Labor (0.7 hr @ $10.50 per hour) $7.35 Variable Overhead (0.7 hr @ $6.00 per hour) $4.20 Fixed Overhead (0.7 hr @ $3.00 per hour) $2.10 Standard cost per unit $23.65 During the year, the BC experienced the following activity relative to the production of toasters: a) Production of toasters totaled 50,000 units. b) A total of 130,000 pounds of materials was purchased at $3.70 per pound. c) There were 10,000 pounds of raw materials in beginning inventory (carried at $4 per pound). There was no ending inventory. d) The company used 36,500 direct labor hours at a total cost of $392,375. e) Actual fixed overhead totaled $95,000. 1) Actual variable overhead totaled $210,000. I The BC produces all of its toasters in a single plant. Standard overhead rates are computed based on normal activity measured in standard direct labor hours. The company has a $10,500 favorable production volume variance. Material price variances are isolated as soon as possible. Required: a) Compute the materials price and efficiency variances. (4 Marks) b) Compute the labor price and efficiency variances. (4 Marks) c) Compute the overhead variances using the four way analysis. (8 Marks) d) What is the denominator level that was used to determine the fixed overhead rate. Give your answer in units and in direct labor hours. (2 Marks) e) Give the journal entry to record the variances calculated in a), b) and c) above (10 Marks)
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Starting on January 1, 2024, you put $125 every month into an account with an APR of 4.10%. Your last payment is on December 1, 2032. On January 1 of that year, the balance in the account, rounded to...
-
Describe the concept of market efficiency. In what sense is this concept an important part of the shareholder wealth maximization objective?
-
Why does the Tiebout model solve the problems with preference revelation that are present with Lindahl pricing?
-
Use the abbreviated comparative financial statements for Pacific Digital Corporation in the Working Papers. The comparative balance sheet for Pacific Digital Corporation lists an intangible asset,...
-
Aqua Corporation purchases nonresidential real property on May 9, 2012, for $1 million. Straight-line cost recovery is taken in the amount of $89,765 before the property is sold on November 30, 2015,...
-
Label Each Question: Examine the different techniques possible for masquerading as a particular host that uses SSL. Explain the operation of server-side scripts and client-side scripts. How are they...
-
Nonconstant growth Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying...
-
Determine the current density when 5.0 A of current is flowing through a copper wire of radius \(0.6 \mathrm{~mm}\). By what amount does current density change if the wire's radius is doubled?
-
What are basic ways a distribution can be effectuated?
-
When one spouse earns a professional degree during a marriage, how might this be factored into a spousal support award?
-
How do courts decide what is equitable? What factors are generally considered important?
-
What is the difference between an equal and an equitable distribution standard?
-
Decide upon an initiative you want to implement that would increase sales over the next five years, (for example, market another product, corporate expansion, and so on). Using the sample financial...
-
Presented below are income statements prepared on a LIFO and FIFO basis for Kenseth Company, which started operations on January 1, 2024. The company presently uses the LIFO method of pricing its...
-
Market prices of goods and services are determined by _________ utility.
-
Marginal utility _________ as consumption increases, which is called the law of _________.
-
_________ are attempting to go beyond the basic assumptions of the traditional economic model and augment it with findings from psychology to gain a greater understanding of complex consumer behavior.
Study smarter with the SolutionInn App