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Question
Ship Co. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is assigned at the rate of $9 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?
A. $25.02.
B. $11.52.
C. $2.40.
D. $2.52.
E. $3.42.
Answer
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Related questions
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Part of the decision to accept additional business should be based on a comparison of the incremental (differential) costs of the added production with the additional revenues to be received.
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Wren Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause(s) of this pattern of variances?
It is possible that the production department found ways to reduce material waste and the purchasing department was able to reduce the cost of materials at the same time. However, the company's purchasing manager may have purchased inferior materials to save costs that might have caused production to waste more materials than expected. The favorable price variance may not be worth what it cost if materials were wasted.
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Explain variance analysis. Describe how variance analysis assists managers.
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Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead spending variance.
Direct labor standard (2 hrs. @ $12.75/hr.) $25.50 per finished unit
Actual direct labor hours 81,500 hrs.
Budgeted units 42,000 units
Actual finished units produced 40,000 units
Standard variable OH rate (2 hrs. @ $14.30/hr.) $28.60 per finished unit
Standard fixed OH rate ($336,000/42,000 units) $8.00 per unit
Actual cost of variable overhead costs incurred $1,140,000
Actual cost of fixed overhead costs incurred $338,000
A. $25,450 favorable.
B. $4,000 favorable.
C. $4,000 unfavorable.
D. $21,450 favorable.
E. $21,450 unfavorable.
Q:
Fletcher Company collected the following data regarding production of one of its products. Compute the fixed overhead cost variance.
Direct labor standard (2 hrs. @ $12.75/hr.) $25.50 per finished unit
Actual direct labor hours 81,500 hrs.
Budgeted units 42,000 units
Actual finished units produced 40,000 units
Standard variable OH rate (2 hrs. @ $14.30/hr.) $28.60 per finished unit
Standard fixed OH rate ($336,000/42,000 units) $8.00 per unit
Actual cost of variable overhead costs incurred $1,140,000
Actual cost of fixed overhead costs incurred $338,000
A. $18,300 favorable.
B. $18,000 favorable.
C. $18,000 unfavorable.
D. $18,300 unfavorable.
E. $14,300 unfavorable.
Q:
Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor efficiency variance.
Direct labor standard (2 hrs. @ $12.75/hr.) $25.50 per finished unit
Actual direct labor hours 81,500 hrs.
Actual finished units produced 40,000 units
Actual cost of direct labor $1,100,250
A. $19,125 favorable.
B. $80,250 favorable.
C. $61,125 favorable.
D. $19,125 unfavorable.
E. $80,250 unfavorable.
Q:
Fletcher Company collected the following data regarding production of one of its products. Compute the direct materials quantity variance.
Direct materials standard (6 lbs. @ $2/lb.) $12 per finished unit
Actual direct materials used 243,000 lbs.
Actual finished units produced 40,000 units
Actual cost of direct materials used $483,570
A. $2,430 unfavorable.
B. $3,570 unfavorable.
C. $2,430 favorable.
D. $6,000 unfavorable.
E. $3,570 favorable.
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Claremont Company specializes in selling refurbished copiers. During the month, the company sold 180 copiers for total sales of $540,000. The budget for the month was to sell 175 copiers at an average price of $3,200. The sales price variance for the month was.
A. $20,000 unfavorable.
B. $20,000 favorable.
C. $36,000 unfavorable.
D. $32,000 unfavorable.
E. $36,000 favorable.
Q:
Milltown Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's sales volume variance for the month.
A. $22,000 unfavorable.
B. $10,000 favorable.
C. $22,000 favorable.
D. $32,000 unfavorable.
E. $32,000 favorable.
Q:
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A. $414,000.
B. $386,000.
C. $394,000.
D. $406,000.
E. $410,000.
Q:
When recording the journal entry for labor, the Work in Process Inventory account is
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B. Debited for actual labor cost.
C. Credited for standard labor cost.
D. Credited for actual labor cost.
E. Not used.
Q:
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A. A debit to Work in Process for $19,500.
B. A credit to Raw Materials for $19,270.
C. A debit to Direct Material Price Variance for $470.
D. A credit to Direct Material Quantity Variance for $700.
E. A debit to Cost of Goods Sold for $230.
Q:
Regarding overhead costs, as volume increases:
A. Total fixed cost increases, total variable cost remains constant.
B. Total fixed cost remains constant, total variable cost increases.
C. Total variable cost decreases, total fixed cost remains constant.
D. Both total fixed cost and total variable cost increase.
E. Both total fixed cost and total variable cost remain constant.
Q:
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Expense Basis for allocation Amount
Administrative Square feet of floor space $15,000
Advertising Amount of dollar sales $8,000
The following information is available for its three operating (sales) departments:
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Sales
Produce 1,000 $80,000
Bakery 800 $30,000
Meats 1,200 $42,000
Totals 3,000 $152,000
What is the total administrative expense allocated to the Meats department?
A. $6,000.
B. $9,000.
C. $4,145.
D. $1,200.
E. $3,000.
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Flamingos, Inc. has four departments. The Administrative Department costs are allocated to the other three departments based on the number of employees in each and the Maintenance Department costs are allocated to the Assembly and Packaging Departments based on their occupied space. Data for these departments follows:
Admin. Maintenance Assembly Packaging
Operating costs $30,000 $15,000 $70,000 $45,000
No. of employees 2 6 4
Sq. ft. of space 2,000 3,000
The total amount of the Administrative Department's cost that would eventually be allocated to the Packaging Department is:
A. $4,800.
B. $12,000.
C. $10,000.
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A company pays $15,000 per period to rent a small building that has 10,000 square feet of space. This cost is allocated to the company's three departments on the basis of the amount of the space occupied by each. Department One occupies 2,000 square feet of floor space, Department Two occupies 3,000 square feet of floor space, and Department Three occupies 5,000 square feet of floor space. If the rent is allocated based on the total square footage of the space, Department One should be charged rent expense for the period of:
A. $4,400.
B. $3,000.
C. $4,000.
D. $2,200.
E. $2,000.
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Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:
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Depreciation 20,000 Cost of goods sold
Advertising 40,000 Net sales
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Number of employees 1,000 1,500 2,500
Net sales $325,000 $475,000 $800,000
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A. $35,750.
B. $45,000.
C. $54,250.
D. $90,000.
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Center B
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B. 26.9%
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Ribs 4,000 4.75
Bacon 6,000 3.50
The total joint cost for the current period was $43,000. How much of this cost should Wren Pork allocate to Loin chops?
A. $0.
B. $5,909.
C. $8,600.
D. $10,750.
E. $43,000.
Q:
Data pertaining to a company's joint production for the current period follows:
L M
Quantities produced 200 lbs. 150 lbs.
Market value at split-off point $8/lb. $16/lb.
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B. $396.
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