Solution 1:
Standard quantity of material (Aluminium) for actual production = 950*4 = 3800 Pound
Actual quantity of material (Aluminium) purchased = Quantity of material used + Ending inventory - Beginning inventory
= 3870 + 50 -70 = 3850 pound
Actual quantity of material (Aluminium) used = 3870 pound
Standard price of Aluminium = $25 per pound
Actual price of Aluminium = $29.40 per pound
Purchase price variance (Aluminium) = (SP - AP) * AQ = ($25 - $29.40) * 3850 = $16,940 U
Usage variance (Aluminium) = (SQ - AQ) * SR = (3800 - 3870) * $25 = $1,750 U
Solution 2:
Standard hours of direct labor = 950 * 5 = 4750 hours
Standard rate of direct labor = $40 per hour
Actual hours of direct labor = 4700 hours
Actual rate of direct labor =$42.40 per hour
Direct labor rate variance = (SR - AR) * AH = ($40 - $42.40) * 4700 = $11,280 U
Direct labor efficiency variance = (SH - AH) * SR = (4750- 4700) * $40 = $2,000 F
Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,870 pounds of aluminum to manufacture 950 units. The company paid $29.40 p...
Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,535 pounds of aluminum to manufacture 937 units. The company paid $29.00 per pound during the month to purchase aluminum. At the beginning of the month, the company had 67 pounds of aluminum on hand. At the end of the month, the company had only 50 pounds of aluminum in its warehouse. Schmidt used 5,400 direct labor hours during the...
EXHIBIT 14.5 Standard Cost Sheet, Product XV-1 Subtotal Total SCHMIDT MACHINERY COMPANY Standard Cost Sheet Product: XV-1 Descriptions Quantity Cost Rate Direct materials: Aluminum 4 pounds $25/pound PVC 1 pound 40/pound Direct labor 5 hours 40/hour Variable factory overhead 5 hours 12/hour Total variable manufacturing cost Fixed factory overhead* 5 hours 24/hour Standard manufacturing cost per unit Standard variable selling and administrative cost per unit $100 40 200 60 120 $400 120 $520 $ 50 *Budgeted fixed factory overhead cost...
Standard Cost Sheet, Product XV-1 EXHIBIT 14.5 SCHMIDT MACHINERY COMPANY Standard Cost Sheet Product: XV-1 Descriptions Quantity Cost Rate Subtotal Total Direct materials: Aluminum $100 4 pounds $25/pound 1 pound PVC 40/pound 40 Direct labor 5 hours 40/hour 200 Variable factory overhead 5 hours 12/hour 60 Total variable manufacturing cost $400 Fixed factory overhead 24/hour 5 hours 120 120 Standard manufacturing cost per unit $520 50 Standard variable selling and administrative cost per unit *Budgeted fixed factory overhead cost $120,000....
Exercise 14-26 Direct Materials and Direct Labor Variances [LO 14-3] Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,485 pounds of aluminum to manufacture 927 units. The company paid $29.20 per pound during the month to purchase aluminum. At the beginning of the month, the company had 57 pounds of aluminum on hand. At the end of the month, the company had only 37 pounds of aluminum in...
Assume that in October 2019 the Schmidt Machinery Company (Exhibit 14.1) manufactured and sold 950 units for $854 each. During this month, the company incurred $380,000 total variable costs and $181,900 total fixed costs. The master (static) budget data for the month are as given in Exhibit 14.1. Required: 1. Prepare a flexible budget for the production and sale of 950 units. 2. Compute for October 2019: a. The sales volume variance, in terms of operating income. Indicate whether this...
5. If Preble had purchased 182,000 pounds of materials at $7.40 per pound and used 160,000 pounds in production, what would be the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.) 6. If Preble had purchased 182,000 pounds of materials at $7.40 per pound and used 160,000 pounds in production, what would be the materials...
Direct Materials Variances Bellingham Company produces a product that requires 6 standard pounds per unit. The standard price is $10 per pound. If 6,300 units required 36,300 pounds, which were purchased at $10.3 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) total direct materials cost variance? Enter a favorable variance as negative number using a minus sign and an unfavorable variance as a positive number. 10,890 Unfavorable a. Direct materials price variance b....
Comparison of Actual and Budgeted Operating Income EXHIBIT 14.1 SCHMIDT MACHINERY COMPANY Analysis of Operating Income For October 2019 (1) (2) (3) Variances Actual Operating Income Master (Static) Budget 220U Units 780 1,000 $ 160,400U 100% $639,600 100% Sales $800,000 Variable costs 99.050F 350,950 55 450.000 56 $350,000 Contribution margin $288,650 45% 44% $ 61,350U 150.000 *** 160.650 Fixed costs 25 19 10.650U $128,000 20% $ Operating income $200,000 25% 72,000U *U denotes an unfavorable effect on operating income. *F...
1. Colina Production Company uses a standard costing system. The following information pertains to the current year. Direct labor hours is the driver used to assign overhead costs to products. Actual production 5,500 units Actual factory overhead costs ($16,500 is fixed) $40,125 Actual direct labor costs (11,250 hours) $131,625 Standard direct labor for 5,500 units: Standard hours allowed 11,000 hours Labor rate $12.00 The factory overhead rate is based on an activity level of 10,000 direct labor hours. Standard cost...
The following data were drawn from the records of Perez Corporation. Planned volume for year (static budget) Standard direct materials cost per unit Standard direct labor cost per unit Total expected fixed overhead costs Actual volume for the year (flexible budget) Actual direct materials cost per unit Actual direct labor cost per unit Total actual fixed overhead costs 3,400 units 3.50 pounds @ $1.50 per pound 2.30 hours @ $3.30 per hour $14,620 3,900 units 3.10 pounds @ $2.00 per...