Question

Containers, Inc. produced 62,500 and sold 59.000 plastic microcomputer cases at a selling price on 10.00 each. Manufacturing overhead is allocated on the basis of machine hours. The standard variable costs Per computer case were: Total Quantity Rate Direct Materials 1.5 kg $ 1.20 per kg $1.80 Direct Labour 0.50 labour hours $ 15.00 per hour 7.50 Variable Overhead 0.20 machine hours $ 6.00 per hour 1.20 Information regarding fixed overhead includes the following: Budgeted Fixed Overhead: Denominator Used: Budgeted Production Volume: Standard Machine Hours/Unit: Total Budgeted Machine Hours: $337,500 Total Budgeted Direct Machine Hours 50,000 units 0.20 machine hours @ $ 1.21 per kg Data on Actual Costs and Quantities: Direct material purchased Direct material used Direct labour incurred Machine Hours used Fixed Overhead Costs Variable Overhead Costs 103,125 kg 91,900 kg 30,300 hours 12,000 hours $340,200 $81,000 @ $ 14.70 per hour ??? 6.75 All inventory accounts had zero beginning balances. All of the work started this period was completed in the period. REQUIRED: Part 1 1. Prepare a standard cost card for one microcomputer case. 2. Calculate these variances: DM Price and Efficiency, DL Price (Rate) and Efficiency, 3. Journalize the following transactions: a. DM purchase, including any related variance(s) b. DM requisitioned to production, including any related variance(s) c. Labour costs incurred, including any related variance(s)

please full calculation and explanation

Answer 1

1) Standard Cost Card - One MicroComputer Case- Container Inc.
Direct Mateial	1.5	Kg	$1.20	Per Kg	$1.80
Direct Labour	0.5	DLHs at	$15.00	per DLH	$7.50
Variable Overhead	0.2	Machine Hour at	$6.00	Per MH	$1.20
Fixed Overhead	0.2	Machine Hour at	$33.75	per MH	$6.75
Standard cost per unit					$17.25
* Fixed Overhead per machine Hour= 337500/(50000*0.20)=$33.75

Part-2

DM Price Variance= ( Std Price - Actual Price) X Actual Quantity

( 1.20-1.21)X 103125= $1031.25 Unfavourable

DM Efficiency Variancce= ( Std Qty- Actual Qty) X Sprice

(( 62500X1.5)-91900)X1.20= $2220 Favourable

Dlabour Rate Variance= ( Std Rate - Actual Rate) X Actual Hour

(15-14.70)X 30300= $9090 favourable

DL Efficiency Variancce= ( Std Hour- Actual Hour) X Std Rate

(( 62500X0.5)-30300)X15= $14250 Favourable

Part-3
S. No.	Account Tittl	Debit	Credit
1	Direct Material - Inventory (103125*1.20)	$123,750
	Direct Material Price Variace	$1,031
	Account Payable (103125*1.21)		$124,781
2	Direct Material Ussed (62500*1.5*1.20)	$1,125,009
	Direct Material Efficiency Variace		$2,220
	Direct materia- Inventory (91900*1.20)		$110,280
3	Direct Labour (62500*0.50*15)	$468,750
	Direct Labour Rate Variance		$9,090
	Direct Labour Efficeicny Variance		$14,250
	Account Payable (30300* 14.70)		$445,410