Required: Gleason Guitars produces acoustic guitars. The table below contains budget and actual information for the month of June: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Direct Material Direct Labor Variable Overhead Fixed Overhead Total Manufacturing Costs Actual Costs 365 units $ 16,900 27,600 9,650 12,900 $ 67,050 Spending Variance Flexible Budget 365 units Volume Variance Master Budget 200 units $ $ 15,400 23,400 9,400 11,700 59,900

Required: Gleason Guitars produces acoustic guitars. The table below contains budget and actual information for the month of June: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Direct Material Direct Labor Variable Overhead Fixed Overhead Total Manufacturing Costs Actual Costs 365 units $ 16,900 27,600 9,650 12,900 $ 67,050 Spending Variance Flexible Budget 365 units Volume Variance Master Budget 200 units $ $ 15,400 23,400 9,400 11,700 59,900

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Description: please answer do not image. Required:Gleason Guitars produces acoustic guitars. The table below contains budget and actual information for the month of June:Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorabl

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 3PA: Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes...

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Refer to Cornerstone Exercise 8.13. In March, Nashler Company produced 163,200 units and had the following actual costs: Required: 1. Prepare a performance report for Nashler Company comparing actual costs with the flexible budget for actual units produced. 2. What if Nashler Companys actual direct materials cost were 1,175,040? How would that affect the variance for direct materials? The total cost variance?
Direct materials and direct labor variance analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Instructions Determine (A) the standard cost per unit for direct materials and direct labor; (B) the price variance, quantity variance, and total direct materials cost variance; and (C) the rate variance, time variance, and total direct labor cost variance.
(Appendix) Calculating factory overhead: four variances Atlanta Adhesives Inc. budgets 15,000 direct labor hours for the year. The total overhead budget is expected to amount to 42,000. The standard cost for a unit of the companys product estimates the variable overhead as follows: The actual data for the period follow: Using the four-variance method, calculate the overhead variances. (Hint: First compute the budgeted fixed overhead rate.)
Factory overhead cost variance report Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 20,000 hours for production: Tannin has available 25,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 22,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Construct a factory overhead cost variance report for the Trim Department for July.
Smith Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for the cost of one basket (unit): Smith Industries made 3,000 baskets in July and used 15,500 pounds of material to make these units. Smith Industries paid $39,370 for the 15,500 pounds of material. A. What was the direct materials price variance for July? B. What was the direct materials quantity variance for July? C. What is the total direct materials cost variance? D. If Smith Industries used 15,750 pounds to make the baskets, what would be the direct materials quantity variance?
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Calculating factory overhead: two variances Monrovia Manufacturing Inc. normally produces 10,000 units of product A each month. Each unit requires 4 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are 10 and 5 per unit, respectively. Cost and production data for June follow: a. Calculate the flexible-budget variance. b. Calculate the production-volume variance. c. Was the total factory overhead under- or overapplied? By what amount?
Refer to the data in Exercise 9.15. Required: 1. Compute overhead variances using a two-variance analysis. 2. Compute overhead variances using a three-variance analysis. 3. Illustrate how the two- and three-variance analyses are related to the four-variance analysis. Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total 787,200, of which 556,800 is fixed overhead. A total of 119,400 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were 230,600, and actual fixed overhead costs were 556,250. Required: 1. Compute the fixed overhead spending and volume variances. How would you interpret the spending variance? Discuss the possible interpretations of the volume variance. Which is most appropriate for this example? 2. Compute the variable overhead spending and efficiency variances. How is the variable overhead spending variance like the price variances of direct labor and direct materials? How is it different? How is the variable overhead efficiency variance related to the direct labor efficiency variance?
Calculating factory overhead: two variances Munoz Manufacturing Co. normally produces 10,000 units of product X each month. Each unit requires 2 hours of direct labor, and factory overhead is applied on a direct labor hour basis. Fixed costs and variable costs in factory overhead at the normal capacity are 2.50 and 1.50 per direct labor hour, respectively. Cost and production data for May follow: a. Calculate the flexible-budget variance. b. Calculate the production-volume variance. c. Was the total factory overhead under- or overapplied? By what amount?
Determining Budgeted Overhead The overhead application rate for a company is 10 per unit, made up of 6 per unit of fixed overhead and 4 per unit of variable overhead. Normal capacity is 10,000 units. In one month there was a favorable flexible budget variance of 2,500. Actual overhead for the month was 110,000 and actual units produced were 13,125. Based on this information, determine the amount of the budgeted overhead for the actual level of production.
ABC Inc. spent a total of $48,000 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc. had budgeted $27,000 for fixed overhead. Actual machine hours were 5.000. Standard hours for units made were 4,800. The standard variable overhead rate was $4.10. What is the variable overhead rate variance?
Direct materials, direct labor, and factory overhead cost variance analysis Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 40,000 units of product were as follows: Each unit requires 0.3 hour of direct labor. Instructions Determine (A) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; (B) the direct labor rate variance, direct labor time variance, and total direct labor cost variance; and (C) the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance.