ACCT208 Lecture Notes - Lecture 10: Deutsche Luft Hansa

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harlequinraven529

18 Apr 2018

School

University of Delaware

Department

Accounting

Course

ACCT208

Professor

Deb Dragone

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Document Summary

Hint: if dlh is your cd for ohthen the 2 hours for dl will be used for voh - they will be the same: the model - used for 4 out of the 6 variances for variable costs. This would be your expense or spending variances. We are looking at it from the point of view of price and quantity differences. Aq = actual quantity of inputs (dm, dl, voh) Ap = actual unit price paid for the inputs. Sp = standard price for the inputs (what we should have paid per unit of input) Sq = input units we should have used for actual units produced. Note: this model does not work for material because your q"s are different: direct material variances. Material quantity variance: material price variance: difference between what is paid for a given quantity to what should have been paid. Why a variance: ex: rush order, different lot size, quality of materials.

Related Questions

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

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

P11-2A Computevariances, and prepare income statement

Ayala Corporation accumulatesthe following data relative to jobs started and finished during themonth of June 2017.

Cost and Production Data

Actual

Standard

Raw materials unit cost

$2.30

$2.10

Raw materials units used

Direct labor hours worked

14,400

15,000

Manufacturing overheadincurred

$189,500

Manufacturing overheadapplied

$189,000

Machine hours expected to beused at normal capacity

42,500

Budgeted fixed overhead forJune

$55,250

Variable overhead rate permachine hour

$3.00

Fixed overhead rate permachine hour

$1.30

Overhead is applied on thebasis of standard machine hours. Three hours of machine timeare

required for each directlabor hour. The jobs were sold for $400,000. Selling andadministrative

expenses were $40,000. Assumethat the amount of raw materials purchased equaled the amount

used.

Instructions

(a) Compute all of thevariances for (1) direct materials and (2) direct labor.

(b) Compute the total overheadvariance.

NOTE: Enter a number in cellsrequesting a value; enter either a number or a formula in cellswith a "?" .

(a)(1)	Total Materials Variance:
	(	AQ	X	AP	)	minus	(	SQ	X	SP)	)
	(	Value	X	Value	)	minus	(	Value	X	Value	)
	=	?	minus	?	=	Value


	Materials price variance:
	(	AQ	X	AP	)	minus	(	AQ	X	SP	)
	(	Value	X	Value	)	minus	(	Value	X	Value	)
	=	?	minus	?	=	Value


	Materials quantity variance:
	(	AQ	X	SP	)	minus	(	SQ	X	SP	)
	(	Value	X	Value	)	minus	(	Value	X	Value	)
	=	?	minus	?	=	Value


(a)(2)	Total Labor Variance:
	(	AH	X	AR	)	minus	(	SH	X	SR	)
	(	Value	X	Value	)	minus	(	Value	X	Value	)
	=	?	minus	?	=	Value


	Labor Price variance:
	(	AH	X	AR	)	minus	(	AH	X	SR	)
	(	Value	X	Value	)	minus	(	Value	X	Value	)
	=	?	minus	?	=	Value


	Labor quantity variance:
	(	AH	X	SR	)	minus	(	SH	X	SR	)
	(	Value	X	Value	)	minus	(	Value	X	Value	)
	=	?	minus	?	=	Value


(b)	Total Overhead Variance:

	=	Actual	minus	Overhead
		Overhead		Applied

	=	Value	minus	Value	=	Value


(c )	AYALA CORPORATION
	Income Statement
	For the Month Ended June 30, 2017
	Sales revenue							Value
	Cost of goods sold (at standard)							?
	Gross profit (at standard)							?
	Variances
	Material price					Value
	Materials quantity					Value
	Labor price					Value
	Labor quantity					Value
	Overhead					Value
	Totalvariance - favorable							?
	Gross profit (actual)							?
	Selling and administrative expenses							Value
	Net income							?

greymammoth149

ACCT208 Lecture Notes - Lecture 10: Deutsche Luft Hansa

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