Question

The Blodeau Manufacturing Company's costng system has two drect-cost calegories drect materials and direct manufacturing labor Manufacturing overhead (both variable and fived) is alocated to products on the basis of standard direct manufacturing labor-hours (DLH) At the beginning of 2017, Blodeau adopled the folowing standards for its manutacturing costs (Clck to view the standards) Click to view additional information) Read the requirements Raquiremerd 1. Prepare a schedue of total standard manutacturing oosts for the 7,500 output units in January 2017 Direct materals Direct manufacturieng labor Manufacturing overhead Vaable Faed Total Regrment 2. For the month of January 2017,compune the variances, indcateg whether each is favorable (F) or untavorable ( &Drect mateas price varianoe, based on parhaes in bThe deet materas eficiency vaiance is o the nest question Choose from any Inor enter any nunber in the input feids and then conli

Answer 1

1.

Direct material (7,500*$18)	$135,000
Direct manufacturing labor (7,500*$120)	900,000
Manufacturing overhead:
Variable (7,500*$30)	225,000
Fixed (7,500*$42)	315,000
Total	$1,575,000

2.

Direct material price variance = Actual quantity*standard price - Actual quantity*actual price

Direct material price variance = 24,000*$6 - 24,000*$6.10

Direct material price variance = $144,000 - 146,400 = $2,400 Unfavorable

Direct material efficiency variance = Standard quantity*standard price - Actual quantity*standard price

Standard quantity = 7,500*3 = 22,500

Direct material efficiency variance = 22,500*$6 - 22,000*$6

Direct material efficiency variance = $135,000 - 132,000 = $3,000 Unfavorable

Direct manufacturing labor price variance = Actual hours*standard rate - Actual hours*actual rate

Direct manufacturing labor price variance = 46,500*$20 - 46,500*$20.10

Direct manufacturing labor price variance = $930,000 - 934,650 = $4,650 Unfavorable

Direct manufacturing labor efficiency variance = Standard hours*standard rate - Actual hours*standard rate

Standard hours = 7,500*6 = 45,000 hours

Direct manufacturing labor efficiency variance = 45,000*$20 - 46,500*$20

Direct manufacturing labor efficiency variance = $900,000 - 930,000 = $30,000 Unfavorable

Total manufacturing overhead spending variance = Total actual manufacturing overhead - [(Actual hours*standard variable manufacturing overhead rate)+Budgeted fixed manufacturing overhead]

Total manufacturing overhead spending variance = $725,000 - [(46,500*$5)+(42,000*$7)]

Total manufacturing overhead spending variance = $725,000 - 526,500 = $198,500 Unfavorable

Variable manufacturing overhead efficiency variance = Standard hours*standard rate - Actual hours*standard rate

Variable manufacturing overhead efficiency variance = 45,000*$5 - 46,500*$5

Variable manufacturing overhead efficiency variance = $225,000 - 232,500 = $7,500 Unfavorable

Production volume variance = Budgeted fixed overhead - Applied fixed overhead

Production volume variance = $294,000 (42,000*$7) - 315,000 (45,000*$7) = $21,000 Favorable