Question

Patterson Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The following are the​ company's cost and standards​ data:

i Standard Price and Volume Standards: Direct materials 22.0 yards per awning at $17.00 per yard Direct labor 5.0 hours per awning at $17.00 per hour Variable MOH standard rate $6.00 per direct labor hour Predetermined fixed MOH standard rate $10.00 per direct labor hour Total budgeted fixed MOH cost $93,500 Print Done

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Answer 1

Answer Page No ① 0 standard cool of grace auoning Direct materials cost - na yendis * $17 per yandi = $ 374 Direct labor cork 5 hours * $14 per hour 85 Variable manufacturing Overhead = shouts x $ per direct blog = $30 Fixed manufacturing overhead - showers x $10 per direct hour labor hours Standard cost of one awning = 374+85 + 30+50 = $539 i skandard cost of one awning = $639 Q@ Qüved material variance Disect material variance 2. Actual material cork - sbordand cost

-(41,100 x Page. No @ 186705) - (1900 8 4 374) = (41,100 X 16.5) - 710600 é 678150 - 410600 = = $32450 F Dieet material variance. - $39450 favorable @ Dicect labas variance Direct labor roiance = Actual labor cost-standard cook - $16.2864 - (1900 x $85) = 162864 - 161500 - 136 Chếaycaoble .: Direct laboo variance = $1364 unfavorable 20 veniable marubachering overhead Variable manufacturing overhead - $51096 --(1900x30) 357096 – 54000 = 960

lage. No .: Variable marubacturing overhead = $96 contoworable en formed manufacturing overhead fixed manufacturing overhead = $92000-(1900x50) = 99000 – 95000 = 44000u 1. fixed manufacturing overhead = 44000 unlewosable Direct material The material variance in favorable as it is negative. Berwise actual coof is less than standard cost. Variance is fawasable due to lowest cost of purchase & elbtcient isbilization of material in production Direct tabor ... The labor variance is unfavorable as it is positive Becau use the actual cost is greater than the standard cost. Variance is un favorable

Variable manubeclining overhead Page. No Variance is unfavorable as it is positive · Cecause the actual cost & greater than the standard cost of manufacturing actual awnings. Variance is unfavorable due to higher cost per direct labor hour fixed manubackiring overhead Vorjance is un favorable ois it is positive . Because the actual coof is greater than the standard cost of manu -facturing actual awnings Variance os unfavorable due to higher cost per direct labor hour. Overhead variance ( variable a fired) is related to labor variance, as overhead sate is based on directs labor hours