question archive 1) Bowie Sporting Goods manufactures sleeping bags
1) Bowie Sporting Goods manufactures sleeping bags
Subject:AccountingPrice:3.87 Bought7
1) Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows:
Direct material of 6.00 yards at $6.00 per yard
Direct labor of 3.00 hours at $20.00 per hour
Overhead applied per sleeping bag at $18.00
In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $6.10 per yard. The labor used was 11,700 hours at an average rate of $19.50 per hour. The actual overhead spending was $96,200.
Determine the total materials variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.
2) Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows:
Direct material of 5.50 yards at $5.75 per yard
Direct labor of 3.00 hours at $16.00 per hour
Overhead applied per sleeping bag at $16.00
In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $5.70 per yard. The labor used was 11,700 hours at an average rate of $16.50 per hour. The actual overhead spending was $96,200.
Determine the labor rate variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.
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Answer:
1)
Material rate variance = 2730 Unfavorable
Material quantity variance = -23400 Favorable
Material cost variance = -20670 Favorable
2)
Labor rate variance =5850 Unfavorable
Labor efficiency variance = -62400 Favorable
Labor cost variance = -56550 Favorable
Step-by-step explanation
1)
Standard data for actual output i.e. 5200 sleeping bags
Standard quantity = 5200 sleeping bags*6 = 31200 yards
Standard rate = $6 per yard
Actual data for actual output:
Actual quantity = 27300 yards
Actual rate = $6.10 per yard
Material rate variance = (Standard rate - Actual rate)*Actual quantity = ($6 - $6.10)*27300 = 2730 Unfavorable
Material quantity variance = (Standard quantity - Actual quantity)*Standard rate = (31200 - 27300)*$6 = -23400 Favorable
Material cost variance = Standard cost - Actual cost = 31200*6 - 27300*6.10 = 187200 - 166530 = -20670 Favorable
2)
Standard data for actual output i.e. 5200 sleeping bags
Standard labor hours = 5200 sleeping bags*3 = 15600 labor hours
Standard rate = $16 per labor hour
Actual data for actual output:
Actual quantity = 11700 labor hours
Actual rate = $16.50 per yard
Labor rate variance = (Standard rate - Actual rate)*Actual quantity = ($16 - $16.50)*11700 = 5850 Unfavorable
Labor efficiency variance = (Standard labor hours - Actual labor hours)*Standard rate = (15600 - 11700)*$16 = -62400 Favorable
Labor cost variance = Standard cost - Actual cost = 15600*16 - 11700*16.50 = 249600 - 193050 = -56550 Favorable
