Chat with AI
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 12
Flexible Budget, Standard Cost Variances, T-Accounts
Ingles Company manufactures external hard drives. At the beginning of the period, the following plans for production and costs were revealed:
During the year, 24,800 units were produced and sold. The following actual costs were incurred:
There were no beginning or ending inventories of direct materials. The direct materials price variance was $10,168 unfavorable. In producing the 24,800 units, a total of 12,772 hours were worked, 3 percent more hours than the standard allowed for the actual output. Overhead costs are applied to production using direct labor hours.
Required:
1. Prepare a performance report comparing expected costs to actual costs.
2. Determine the following:
a. Direct materials usage variance
b. Direct labor rate variance
c. Direct labor usage variance
d. Fixed overhead spending and volume variances
e. Variable overhead spending and efficiency variances
3. Use T-accounts to show the flow of costs through the system. In showing the flow, you do not need to show detailed overhead variances. Show only the over- and underapplied variances for fixed and variable overhead.
Ingles Company manufactures external hard drives. At the beginning of the period, the following plans for production and costs were revealed:
During the year, 24,800 units were produced and sold. The following actual costs were incurred:
There were no beginning or ending inventories of direct materials. The direct materials price variance was $10,168 unfavorable. In producing the 24,800 units, a total of 12,772 hours were worked, 3 percent more hours than the standard allowed for the actual output. Overhead costs are applied to production using direct labor hours.
Required:
1. Prepare a performance report comparing expected costs to actual costs.
2. Determine the following:
a. Direct materials usage variance
b. Direct labor rate variance
c. Direct labor usage variance
d. Fixed overhead spending and volume variances
e. Variable overhead spending and efficiency variances
3. Use T-accounts to show the flow of costs through the system. In showing the flow, you do not need to show detailed overhead variances. Show only the over- and underapplied variances for fixed and variable overhead.
Explanation
Verified
Verified
Variance analysis: It is the examination...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Why don’t you like this exercise?
Other Minimum 8 character and maximum 255 character
Character 255
