Rudd Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2017, 10,400 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labor hours. All materials purchased were used. Cost Element Direct materials. Direct labor Overhead Standard (per unit) 6 yards at $4.50 per yard 1.41 hours at $13.80 per hour 1.41 hours at $7.30 per hour (fixed $4.90; variable $2.40) Actual $276,760 for 62,900 yards ($4.40 per yard) $219,589 for 15,464 hours ($14.20 per hour) $48,800 fixed overhead $36,500 variable overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $68,600, and budgeted variable overhead was $33,600. Compute the overhead controllable variance and the overhead volume variance.

Rudd Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2017, 10,400 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labor hours. All materials purchased were used. Cost Element Direct materials. Direct labor Overhead Standard (per unit) 6 yards at $4.50 per yard 1.41 hours at $13.80 per hour 1.41 hours at $7.30 per hour (fixed $4.90; variable $2.40) Actual $276,760 for 62,900 yards ($4.40 per yard) $219,589 for 15,464 hours ($14.20 per hour) $48,800 fixed overhead $36,500 variable overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $68,600, and budgeted variable overhead was $33,600. Compute the overhead controllable variance and the overhead volume variance.

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Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 28P: Haversham Corporation produces dress shirts. The company uses a standard costing system and has set...

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