c) What is the standard quantity of materials allowed for actual production (SQAJI? d) What is the standard labor hours allowed for actual production {SBA}? e) Compute the following variances for March: 1

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c) What is the standard quantity of materials allowed for actual production (SQAJI?

d) What is the standard labor hours allowed for actual production {SBA}?

e) Compute the following variances for March:

1. Direct materials price variance {based on quantity purchased]

2. Direct materials efficiency variance

3. Direct labor price variance

4 Direct labor efficiency variance

f) Prepare journal entries to record the following the transactions and variances under a standard costing system: 1. Materials purchases

2. Materials used in production

3. Direct labor

Foster Company has the following standards per finished unit for its product:

Direct materials 3 lbs. @ $4.00 per lb. $12.00

Direct labor 2 hrs. @ $13.00 per hr. 26.00

Manufacturing overhead:

Variable 2 Direct labor Hrs. @ $5.00 10.00

Fixed 2 DLH @ $7.00 per DLH 14.00

Total standard cost per unit $62.00

Results for March were:

Budgeted units of production 4,000

Actual units produced 3,800

Direct materials purchases 14,000 lbs. @ $3.75 per lb.

Direct materials used in production 12,600 lbs.

Direct labor incurred 7,200 hrs. @ $13.50 per hr.

Actual variable overhead $39,400

Budgeted fixed overhead $ ?

Actual fixed overhead $52,700 a.

a) Compute the total budgeted fixed overhead. (Hint: The FOH rate was calculated by dividing budgeted FOH by budgeted DLH, so use the rate to back in to the budgeted FOH.)

b) Prepare a flexible budget analysis for March:

1. Compute the static budget amounts for direct materials, direct labor, variable and fixed overhead. (Hint: Based on budgeted volume and budgeted rates)

2. Compute the flexible budget amounts for direct materials, direct labor, variable and fixed overhead. (Hint: Based on actual volume and budgeted rates)

3. Compute the sales volume variances and indicate For U. (Hint: Compare static and flexible budgets.)

4. Compute the flexible budget variances and indicate For U. (Hint: Compare flexible budget to actual.)