Wiarton Wood Products Ltd. is planning to produce 150,000 metal widgets for the coming year. Each unit requires 2 standard hours of direct labour for completion at a standard direct labour rate of $14.00 per hour, and a standard of 2.25 grams of direct material at a standard cost of $5 per gram. The company uses direct labour hours to assign overhead to products. The total overhead budgeted for the coming year is $1,200,000, and the standard fixed overhead rate is $3.50 per unit produced. Actual results for the year were: Production (units) Actual direct labour hours Beginning direct materials inventory (units) Ending direct materials inventory (units) Direct materials purchases (units) Cost of direct materials purchases Direct labour cost Actual variable overhead Actual fixed overhead Required: 142,000 270,000 15,000 16,400 600,000 $2,900,000 $4,100,000 $621,000 $ 490,000 1. Compute the variable overhead spending and efficiency variances. Label as favourable or unfavourable. Spending variance Unfavourable ✓ Efficiency variance 2. Compute the fixed overhead spending and volume variances. Label as favourable or unfavourable. Spending variances Volume variances
Wiarton Wood Products Ltd. is planning to produce 150,000 metal widgets for the coming year. Each unit requires 2 standard hours of direct labour for completion at a standard direct labour rate of $14.00 per hour, and a standard of 2.25 grams of direct material at a standard cost of $5 per gram. The company uses direct labour hours to assign overhead to products. The total overhead budgeted for the coming year is $1,200,000, and the standard fixed overhead rate is $3.50 per unit produced. Actual results for the year were: Production (units) Actual direct labour hours Beginning direct materials inventory (units) Ending direct materials inventory (units) Direct materials purchases (units) Cost of direct materials purchases Direct labour cost Actual variable overhead Actual fixed overhead Required: 142,000 270,000 15,000 16,400 600,000 $2,900,000 $4,100,000 $621,000 $ 490,000 1. Compute the variable overhead spending and efficiency variances. Label as favourable or unfavourable. Spending variance Unfavourable ✓ Efficiency variance 2. Compute the fixed overhead spending and volume variances. Label as favourable or unfavourable. Spending variances Volume variances
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 1BE: Single plantwide factory overhead rate The total factory overhead for Bardot Marine Company is...
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