Question

Your next-door neighbor recently began a new job as assistant controller for Conundrum Corporation. As her first assignment, she prepared a performance report for January. She was scheduled to present the report to management the next morning, so she brought it home to review. As the two of you chatted in the backyard, she decided to show you the report she had prepared. Unfortunately, your dog thought the report was an object to be fetched. The pup made a flying leap and got a firm grip on the report. After chasing the dog around the block, you managed to wrest the report from its teeth. Needless to say, it was torn to bits. Only certain data are legible on the report. This information follows:

CONUNDRUM CORPORATION

Performance Report for the Month of January

Direct

Direct

Variable

Fixed

Material

Labor

Overhead

Overhead

Standard allowed cost given actual output

?

?

(? kilograms

(4 hours

at $10 per

at $14

kilogram)

per hour)

Flexible overhead budget

?

$

56,000

Actual cost

$

216,000

?

?

?

(16,000

(11,200

kilograms

hours

at $13.5

at ? per

kilogram per)

hour)

Direct-material price variance

?

Direct-material quantity variance

$

6,300

U

Direct-labor rate variance

$

11,200

U

Direct-labor efficiency variance

5,600

F

Variable-overhead spending variance

$

2,670

U

Variable-overhead efficiency variance

2,400

F

Fixed-overhead budget variance

$

3,350

U

Fixed-overhead volume variance

?

In addition to the fragmentary data still legible on the performance report, your neighbor happened to remember the following facts.

• Planned production of Conundrum's sole product was 600 units more than the actual production.
• All of the direct material purchased in January was used in production.
• There were no beginning or ending inventories.
• Variable and fixed overhead are applied on the basis of direct-labor hours. The fixed overhead rate is $4.00 per hour.

Required:

Required:

Feeling guilty, you have agreed to help your neighbor reconstruct the following facts, which will be necessary for her presentation. (Do not round your intermediate calculations. Round "Actual variable-overhead rate" to 2 decimal place, and "Standard direct-material quantity per unit" to nearest whole number. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)

Answer 1

Above Problem completely based on Overhead budget , Material price variance , Labour rate on the basis of fixed overhead etc. Please follow step by step analysis and derived number

		Source
Budgeted Direct Labour Hr ( calculated
based on Fixed overhead / rate per hr)
Fixed Overhead ( $)(a)	56000	( as per Q)
Fixed Overhead rate /hr( $)(b)	4	( as per Q)
Labour hours (a/b)=c	14000
Planned Production unit
Labour hours (c)	14000
Standard Hours / unit (d)	4	( as per Q)
Planned Production unit(c/d)	3500
Actual Production would be	2900	( as per Q)
( less than 600 unit as Standard production)

As per Q mean - already there in Question

Fixed Overhead Budget Var ( U)$	Actual Fixed Overhead - Budgeted Fixed Overhead		Budgeted Fixed Oh($)
3350	Actual Fixed Overhead ($)	-	56000
Actual Fixed Overhead($)	3350+56000
Actual Fixed Overhead($)	59350
Standard allowed Direct Labour Hr
Direct Labour Hr( e)	4	( as per Q)
Actual Production(f)	2900	( derived above)
Standard allowed Direct Labour Hr(e*F)	11600
Direct Labour rate Var	Actual Hr* (Actual Rate-standard Rate)
$11200 (U)	11200*( Actual rate- $14)
Actual Rate	$11200/11200+$14
Actual Rate	$15
Standard Variable Overhead rate(svr)
Variable Overhead Efficiency Var	SVR(AH-SH)
$2670 ( As per Question)	svr(11200-14000)
AH ( as per Question)	11200
SH ( as derived above)	11600
2400 f	svr(11200-11600)
SVR	2400/(11200-11600)	-400	6.000
SVR$/HR	6.000

Variable Overhead Spending Var	AH(AVR-SVR)
AH ( as per Question)	11200
SVR( as derived above)	6.000
$2670 (u)	11200*(avr-6)
avr	2670/11200+6
AVR $/HR	6.24
Direct Material Quantity Var	SP (AQ-SQ)
$6300 U
SP ( Standard price - as per Question)	$10
Actual Quantity ( as per Question)	16000 kg
$6300 U	$10(16000-sq)
Standard Quatity	6300/10+16000
Standard Quatity (SQ)- Kg	16630
Standard direct material Per unit
Standard Quantity (SQ)- Kg (g)	16630
Actual Unit ( as derived above)(h)	2900
Standard direct material Per unit-(g/h)	5.7
Direct Material Price Variance
Actual Quantity ( as per Question)	16000 kg
Actual Price / Kg(as per Question)	$13.5/kg
SP ( Standard price - as per Question)	$10
Direct Material Price Variance	16000*(13.5-10)
Direct Material Price Variance $U	56000

Applied Fixed overhead
Fixed Overhead rate /hr( $) (I)	4	( as per Q)
Standard allowed Direct Labour Hr(j)	11600	(derived as above)
Applied Fixed overhead( i*J) $	46400
Fixed overhead volume variance
Budgeted Fixed Overhead $	56000	( as per Q)
Standard Fixed Overhead $( as derived above)	46400
Fixed overhead volume variance$ F	9600