Chapter 21: Q17QS (page 969)
Refer to the information in QS 21-16. Alvarez records standard costs in its accounts. Prepare the journal entry to charge overhead costs to the Work in Process Inventory account and to record any variances.
The goods-in-process inventory of the company amounts to $184,600.
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Refer to information in QS 21-3. Assume that actual sales for the year are \(480,000 (26,000 units), actual variable costs for the year are \)112,000, and actual fixed costs for the year are $145,000. Prepare a flexible budget performance report for the year.
Frontera Company’s output for the current period results in a \(20,000 unfavorable direct labor rate variance and a \)10,000 unfavorable direct labor efficiency variance. Production for the current period was assigned a $400,000 standard direct labor cost. What is the actual total direct labor cost for the current period?
Assume that Samsung is budgeted to operate at 80% of capacity but actually operates at 75% of capacity. What effect will the 5% deviation have on its controllable variance? Its volume variance?
Fogel Co. expects to produce 116,000 units for the year. The company’s flexible budget for 116,000 units of production shows variable overhead costs of \(162,400 and fixed overhead costs of \)124,000. For the year, the company incurred actual overhead costs of $262,800 while producing 110,000 units. Compute the controllable overhead variance and classify it as favorable or unfavorable.
Trico Company set the following standard unit costs for its single product.
Direct materials (30 Ibs. @ \(4 per Ib.) | \)120 |
Direct labor (5 hrs. @ \(14 per hr.) | 70 |
Factory overhead—variable (5 hrs. @ \)8 per hr.) | 40 |
Factory overhead—fixed (5 hrs. @ \(10 per hr.) | 50 |
Total standard cost | \)280 |
The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available.
| Operating Level | |||
| 70% | 80% | 90% | |
Production in units | 42,000 | 48,000 | 54,000 |
Standard direct labor hours | 210,000 | 240,000 | 270,000 |
Budgeted overhead | |||
Fixed factory overhead | \(2,400,000 | \)2,400,000 | \(2,400,000 |
Variable factory overhead | \)1,680,000 | \(1,920,000 | \)2,160,000 |
During the current quarter, the company operated at 90% of capacity and produced 54,000 units of product; actual direct labor totaled 265,000 hours. Units produced were assigned the following standard costs.
Direct materials (1,620,000 Ibs. @ \(4 per Ib.) | \)6,480,000 |
Direct labor (270,000 hrs. @ \(14 per hr.) | 3,780,000 |
Factory overhead (270,000 hrs. @ \)18 per hr.) | 4,860,000 |
Total standard cost | \(15,120,000 |
Actual costs incurred during the current quarter follow.
Direct materials (1,615,000 Ibs. @ \)4.10 per lb.) | \(6,621,500 |
Direct labor (265,000 hrs. @ \)13.75 per hr.) | 3,643,750 |
Fixed factory overhead costs | 2,350,000 |
Variable factory overhead costs | 2,200,000 |
Total actual costs | $14,815,250 |
Required
1. Compute the direct materials cost variance, including its price and quantity variances.
2. Compute the direct labor cost variance, including its rate and efficiency variances.
3. Compute the overhead controllable and volume variances.
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