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    Q6 Standard Costing

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    Jeepee John
    Deines, Inc. uses a standard costing system to manufacture tybos. In March, the company produced 7,500 tybos but used more materials and labor hours than standard. This resulted in unfavorable materials price and quantity variances as well as unfavorable labor price and quantity variances. Hite Company provides standard costs for Product A and expected to produce 25,000 units in 2016. Actual production was 26,000 units but materials and labor costs were higher than standard, resulting in unfavorable materials price and labor variances as well as unfavorable overhead variances. Feeney Company also uses standard costs and expected higher production levels than actual. Materials and labor costs were higher

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    Q6 Standard Costing

    Uploaded by

    Jeepee John
    157 views2 pages
    Deines, Inc. uses a standard costing system to manufacture tybos. In March, the company produced 7,500 tybos but used more materials and labor hours than standard. This resulted in unfavorable materials price and quantity variances as well as unfavorable labor price and quantity variances. Hite Company provides standard costs for Product A and expected to produce 25,000 units in 2016. Actual production was 26,000 units but materials and labor costs were higher than standard, resulting in unfavorable materials price and labor variances as well as unfavorable overhead variances. Feeney Company also uses standard costs and expected higher production levels than actual. Materials and labor costs were higher

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    Deines, Inc. uses a standard costing system to manufacture tybos. In March, the company produced 7,500 tybos but used more materials and labor hours than standard. This resulted in unfavorable materials price and quantity variances as well as unfavorable labor price and quantity variances. Hite Company provides standard costs for Product A and expected to produce 25,000 units in 2016. Actual production was 26,000 units but materials and labor costs were higher than standard, resulting in unfavorable materials price and labor variances as well as unfavorable overhead variances. Feeney Company also uses standard costs and expected higher production levels than actual. Materials and labor costs were higher

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    157 views2 pages

    Q6 Standard Costing

    Uploaded by

    Jeepee John
    Deines, Inc. uses a standard costing system to manufacture tybos. In March, the company produced 7,500 tybos but used more materials and labor hours than standard. This resulted in unfavorable materials price and quantity variances as well as unfavorable labor price and quantity variances. Hite Company provides standard costs for Product A and expected to produce 25,000 units in 2016. Actual production was 26,000 units but materials and labor costs were higher than standard, resulting in unfavorable materials price and labor variances as well as unfavorable overhead variances. Feeney Company also uses standard costs and expected higher production levels than actual. Materials and labor costs were higher

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    COST ACCOUNTING AND COST MANAGEMENT 2

    Take Home Quiz on Standard Costing


    July 13, 2016
    Problem 1 2 points each
    Deines, Inc. manufactures one product called tybos. The company uses a standard cost system and sells
    each tybo for 8. At the start of monthly production, Deines estimated 8,000 tybos would be produced in
    March. Deines has established the following material and labor standards to produce one tybo:
    Standard Quantity
    Standard Price
    Direct materials
    2.5 pounds
    3 per pound
    Direct labor
    0.6 hours
    10 per hour
    During March 2016, the following activity was recorded by the company relating to the production of
    tybos:
    1.
    2.
    3.
    4.

    The company produced 7,500 units during the month.


    A total of 20,000 pounds of materials were purchased at a cost of 55,000.
    A total of 20,000 pounds of materials were used in production.
    4,000 hours of labor were incurred during the month at a total wage cost of 44,000.

    Instructions
    Calculate the following variances for March for Deines, Inc.
    (a) Materials price variance
    (b) Materials quantity variance
    (c) Labor price variance
    (d) Labor quantity variance
    Problem 2 2 points each
    Hite Company has developed the following standard costs for its product for 2016:
    HITE COMPANY
    Standard Cost Card
    Product A
    Cost Element
    Standard Quantity
    Direct materials
    4 pounds
    Direct labor
    3 hours
    Manufacturing overhead
    3 hours

    Standard Price
    3
    8
    4

    Standard Cost
    12
    24
    12
    48

    The company expected to produce 25,000 units of Product A in 2016 and work 75,000 direct labor hours.
    Actual results for 2016 are as follows:
    26,000 units of Product A were produced.
    Actual direct labor costs were 630,800 for 76,000 direct labor hours worked.
    Actual direct materials purchased and used during the year cost 283,500 for 105,000 pounds.
    Actual variable overhead incurred was 130,000 and actual fixed overhead incurred was 170,000.
    Instructions
    Compute the following variances showing all computations to support your answers. Indicate whether the
    variances are favorable or unfavorable.
    (a) Materials quantity variance.
    (b) Total direct labor variance.
    (c) Direct labor quantity variance.
    (d) Direct materials price variance.
    (e) Total overhead variance.

    Problem 3 2 points each


    Feeney Company developed the following standard costs for its product for 2016:
    FEENEY COMPANY
    Standard Cost Card
    Cost Elements
    Direct materials
    Direct labor
    Variable overhead
    Fixed overhead

    Standard Quantity
    4 pounds
    2 hours
    2 hours
    2 hours

    Standard Price
    5
    10
    4
    2

    Standard Cost
    20
    20
    8
    4
    52

    The company expected to work at the 60,000 direct labor hours level of activity and produce 30,000 units
    of product.
    Actual results for 2016 were as follows:
    28,400 units of product were actually produced.
    Direct labor costs were 546,000 for 56,000 direct labor hours actually worked.
    Actual direct materials purchased and used during the year cost 554,400 for 115,500 pounds.
    Total actual manufacturing overhead costs were 340,000.
    Instructions
    Compute the following variances for Feeney Company for 2016 and indicate whether the variance is
    favorable or unfavorable.
    1. Direct materials price variance.
    2. Direct materials quantity variance.
    3. Direct labor price variance.
    4. Direct labor quantity variance.
    5. Overhead controllable variance.
    6. Overhead volume variance.

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