Helix Company_Standard Cosy_Variances

$11.00

Description

Helix Company produces
several products in its factory, including a karate robe. The company uses
a standard cost system to assist in the control of costs. According to the
standards that have been set for the robes, the factory should work 780 direct labor-hours
each month and produce 1,950 robes. The standard costs associated with
this level of production are as follows:

Total Per Unit of
Product
Direct
materials . . . . . . . . . . . . . . . . . . $35,490 $18.20
Direct
labor . . . . . . . . . . . . . . . . . . . . . . $7,020 3.60
Variable
manufacturing overhead (based on
direct
labor-hours) . . . . . . . . . . . . . . . . .$2,340 1.20
$23.00

During April, the factory
worked only 760 direct labor-hours and produced 2,000 robes. The following actual costs were
recorded during the month:

Total Per Unit of
Product
Direct
materials (6,000 yards) . . . . . . .$36,000 $18.00
Direct
labor . . . . . . . . . . . . . . . . . . . . . . $7,600 3.80
Variable
manufacturing overhead . . . . $3,800 1.90

$23.70
=====

At standard, each robe
should require 2.8 yards of material. All of the materials purchased during
the month were used in production.

Required:
Compute
the following variances for April:
1. The
materials price and quantity variances.
2. The
labor rate and efficiency variances.
3. The
variable manufacturing overhead rate and efficiency variances

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