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 Variance Variance $3,450F $7,275U Price or Quantity or Standard Rate Efficiency Volume Cost Variance Variance Direct materials Direct labour $202,500 $135,000 $4,500U $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: 2. How many kilograms of direct material were purchased and used in production? 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 Variance Variance $3,450F $7,275U Price or Quantity or Standard Rate Efficiency Volume Cost Variance Variance Direct materials Direct labour $202,500 $135,000 $4,500U $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: 2. How many kilograms of direct material were purchased and used in production?
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Direct Material were purchased used in production in KG Direct Material ... View the full answer
Related Book For
Financial Management for Decision Makers
ISBN: 978-0138011604
2nd Canadian edition
Authors: Peter Atrill, Paul Hurley
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