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Wallis Company manufactures only one product and uses a standard cost system. The company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. All of the company's manufacturing overhead costs are fixed-it does not incur any variable manufacturing overhead costs. The predetermined overhead rate is baseed on a cost formula that estimated $2,882,000 of fixed manufacturing overhead for an estimated allocation base of 288,200 direct labor-hours. Wallis does not maintain any beginning or ending work in process inventory. The company's beginning balance sheet is as follows: Wallis Company Balance Sheet 1/1/XX (dollars in thousands) Assets Cash 720 Raw materials inventory Finished goods inventory Property, plant, and equipment, net 170 290 8,700 $ 9,880 Total assets Liabilities and Equity $ 9,880 $ 9,880 Retained earnings Total liabilities and equity The company's standard cost card for its only product is as follows: (2) (1) Standard Quantity Standard Standard Price Cost (1) x (2) 60.80 39.00 Inputs Direct materials or Hours or Rate 2 pounds $ 30.40 per pound $ 13.00 per hour 10.00 per hour Direct labor 3.00 hours 3.00 hours 30.00 Fixed manufacturing overhead $129.80 Total standard cost per unit

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Part 1 95,200*2 Standard Material Price Standard Quantity Actual Quantity Purchased Actual Quantity used Actual Matrial Price 30.40 190,400 231,000 215,500 29.70 $ Material Price Variance AQIAP-SP) (Actual Price Standard Price) * Actual Quantity 30.40 * 231000 29.70 161,700 Favorable Material Quantity Variance SP(AQ-SQ) (Actual Quantity 215,500 763,040 Unfavorable Standard Qty) * Standard Price 190,400 * $ 30.40 $ Standard Hour Rate Standard Hour Actual Hours 95,200*3 13.00 285,600 245,400 Actual Hour Rate $ 16.00 Labor Rate Variance AH(AR-SR) (Actual Rate Standard Rate) * Actual Hours $ 13.00 * 245400 $ 16.00 736,200 Unfavorable Labor Efficiency Variance SR(AH-SH) (Actual Quantity 245,400 $ 522,600 Favorable Standard Qty) * Standard Price 285,600 * $ 13.00 Fixed overhead variance: Actual Fixed overhead Budgeted Fixed Overhead Overhead applied $ $ $ 2,741,000 a 2,882,000 b 2,856,000 C 95,200*3 Hours $10 Budget variance Volume Variance a-b b-c $ $ 141,000 Favorable 26,000 Unfavorable Part 4 Income Statement $ 15,674 11,968 700 Sales Less: Cost of goods sold at standard Total Variance Adjustment Cost of goods sold Gross Margin Less: Selling and admin Expense Net operating Income $ $ $ -12,668 3,007 -2,121 886

Mat Price Mat Qty Variance Variance Labor Rate Variance Labor eff FOVH Budget Variance Variance Work in process Cash $ $ Finished goods PP&E 290 $ 8,700 FOVH Vol Retained Variance Earning $ 9,880 $ 162 Raw Materials 720 $ -6,861 $ 7,022 -6,551 -3,926 -1,342 $ $ -763 + DOOOO $ -736 $ 523 $ $ 5,788 3,713 2,856 -12,357 $ -1,399 141 $ -26 $ 12,357 $ 15,674 $ -11,968 $ 15,674 $ -11,968 $ -2,121 $ -700 $ -2,121 $ -162 $ 763 $ 736 $ -523 $ -141 $ 26 Total $ 2,144 $ 641 $ $ 679 $ 7,301 $ - $ - $ - $ - $ - $ - $ 10,766