ACC 406 Lecture Notes - Lecture 9: Minivan, Standard Cost Accounting, International Labor Standards

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mauvehound402

23 Nov 2016

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Quantity decision: the amount of input that should be used per unit of output. Pricing decision: the amount that should be paid for the quantity of the input to be used. Standard cost per unit = quantity standard x price standard. Ideal standards: demand maximum efficiency and can be achieved only if everything operates perfectly. Currently attainable standards: can be achieved under efficient operating conditions. Allowance is made for normal breakdowns interruptions, less than perfect skill and so on. Standard cost sheet: provides the production data needed to calculate the standard unit cost. Sq (standard quantity of materials allowed) = unit quantity standard x actual output. Sh ( standard hours allowed) = unit labour standard x actual output. Sq = standard quantity of input allowed for the actual output. Total budget variance = actual cost planned cost. Price (rate) variance = (ap sp) x aq. Usage (efficiency) variance = (aq sq) x sp.

Related Questions

The? Sudbury, South? Carolina, plant of Shannon Sports Companyhas the following standards for its soccer ball? production:

Standards:	0.1 yard
Material (leather) per soccer ball	$21
Material price per yard	0.40 Hour
Direct labor hours per soccer ball	$11 per hour
Wage rate per direct labor hour	$12 per direct labor hour
Variable support cost rate
Actual results for October:
Used 13500 yards of raw material, purchased for $280,530.00. Paid for 8,200 direct labor hours at $11.30 per hour. Incurred $82,000 of variable support costs Manufactured 25,000 soccer balls

Requirements

Determine the following variances for? October:

?(a)	Total direct material cost variance and indicate whether thevariance is favorable or unfavorable
?(b)	Total direct labor cost variance
?(c)	Total variable support cost variance
?(d)	Direct material price variance
?(e)	Direct material quantity variance
?(f)	Direct labor rate variance
?(g)	Direct labor efficiency variance
?(h)	Variable support rate variance
?(i)	Variable support efficiency variance

AH? = Actual number of direct labor hours

AP? = Actual price per unit of materials

AQ? = Actual quantity of materials used

AR? = Actual wage rate

SH? = Number of direct labor hours allowed given the level ofoutput achieved

SP? = Estimated or standard price per unit of materials

SQ? = Standard quantity of materials allowed for the productionlevel achieved

SR? = Standard wage rate

blackcricket13

17 A manufacturing company that has only one product hasestablished the following standards for its variable manufacturingoverhead. Variable manufacturing overhead standards are based onmachine-hours.

Standard hours per unit of output	3.90	machine-hours
Standard variable overhead rate	$11.25	per machine-hour

The following data pertain to operations for the last month:

Actual hours	8,800	machine-hours
Actual total variable manufacturing overheadcost	$95,850
Actual output	2,200	units

What is the variable overhead efficiency variance for themonth?

$2,692 U

$7,513 F

$2,475 U

$7,513 U

18 The following materials standards have been established for aparticular product:


Standard quantity per unit of output	4.9	grams
Standard price	$12.00	per grams

The following data pertain to operations concerning the productfor the last month:


Actual materials purchased	3,800	grams
Actual cost of materials purchased	$ 44,270
Actual materials used in production	3,100	grams
Actual output	570	units

The direct materials purchases variance is computed when thematerials are purchased.

Required:
a.	What is the materials price variance for the month?(Input the amount as a positive value. Leave no cells blank- be certain to enter "0" wherever required. Indicate the effect ofeach variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance.)

Materials Price Variance_______________

b.	What is the materials quantity variance for the month?(Input the amount a as positive value. Leave no cells blank- be certain to enter "0" wherever required. Indicate the effect ofeach variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance.)

Materials quantity variance____________

purplemarten16

Buil Corporation manufactures a single product. The standard cost per unit of product is as follows.

Direct materialsâ2 pounds of plastic at $6 per pound $12

Direct laborâ2 hours at $13 per hour 26

Variable manufacturing overhead 7

Fixed manufacturing overhead 5

Total standard cost per unit $50

The master manufacturing overhead budget for the month based on normal productive capacity of 20,000 direct labor hours (10,000 units) shows total variable costs of $70,000 ($3.50 per labor hour) and total fixed costs of $50,000 ($2.50 per labor hour). Normal productive capacity is 20,000 direct labor hours. Overhead is applied on the basis of direct labor hours. Actual costs for November in producing 9,700 units were as follows.

Direct materials (20,000 pounds) $119,000

Direct labor (19,600 hours) 256,760

Variable overhead 68,800

Fixed overhead 50,000

Total manufacturing costs $494,560

The purchasing department normally buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

Instructions

(a) Compute all of the materials and labor variances.

(b) Compute the total overhead variance.

(a) Total Materials Variance:

( AQ x AP )	-	( SQ x SP )	=
	-		=
	-		=

Materials Price Variance:

( AQ x AP )	-	( AQ x SP )	=
	-		=
	-		=

Total Materials Variance:

( AQ x AP )	-	( SQ x SP )	=
	-		=
	-		=

Total Labor Variance:

( AH x AR )	-	( SH x SR )	=
	-		=
	-		=

*9,700 x 2

Labor Price Variance:

( AH x AR )	-	( SH x SR )	=
	-		=
	-		=

Labor Quantity Variance:

( AH x SR )	-	( SH x SR )	=
	-		=
	-		=

(b) Total Overhead Variance:

Actual Overhead	-	Overhead Applied	=
	-		=
	-		=

goldzebra102

ACC 406 Lecture Notes - Lecture 9: Minivan, Standard Cost Accounting, International Labor Standards

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