Rogen Corporation manufactures product. The standard cost per unit of product is shown below.
| Direct materials - 1 pound plastic at $7.0 per pound | $7.00 |
| Direct labor - 1.6 hours at $12.00 per hour | 19.20 |
| Variable manufacturing overhead | 12.00 |
| Fixed manufacturing overhead | 4.00 |
| Total standard cost per unit | $42.20 |
The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.00 / 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2,50 per hour). Actual costs for October in producing 4,800 units were as follows.
| Direct materials(5,100 pounds) | $36,720 |
| Direct labor(7,400 hours) | 92,500 |
| Variable overhead | 59,700 |
| Fixed overhead | 21,000 |
| Total manufacturing costs | $209,920 |
Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2020.
Rudd Clothiers is a small company the manufactures tall- men's suits. The company has used a standard cost accounting system. In May 2020, 11,250 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.
Kansas Company uses a standard cost accounting system. In 2020, the company produced 28,000 units. Each several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,000 direct labor hours. During the year, 117,000 pounds of raw materials were purchased at $0.92 per pound. All materials purchased were used during the year.
Hart Labs, Inc, provides mad cow disease testing for both state and federal governmental agricultural agencies. Because the company's customers are governmental agencies, prices are strictly regulated. Therefore, hart Labs must constantly monitor and control its testing costs. Shown below are the standard costs for a typical test.
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,900 units of product B was received. The standard cost of one unit of product B is as follows.
Using the information in P25-1A, compute the overhead controllable variance and the overhead volume variance.
Using the information in P25-1A, compute the overhead controllable variance and the overhead volume variance.
Using the information in P25-1A, compute the overhead controllable variance and the overhead volume variance.
Using the information in P25-5A, compute the overhead controllable variance and the overhead volume variance.
Read more: Problem-10: Standard Costs and Balanced Scorecard
Minhajur Rahaman
