Sheridan, Ltd.manufacturesshirts,which itsells to customers for embroidering with various slogans and emblems. The standard cost...

80.2K

Verified Solution

Question

Accounting

Sheridan, Ltd.manufacturesshirts,which itsells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows.

 StandardPrice StandardQuantity StandardCost

Direct materials	$3peryard	2.00	yards	$6.00
Direct labor	$14perDLH	0.75	DLH	10.50
Variableoverhead	$3.20perDLH	0.75	DLH	2.40
Fixedoverhead	$3perDLH	0.75	DLH	2.25
				$21.15

SandyRobison, operationsmanager, was reviewing theresults forNovemberwhen he becameupsetbytheunfavorablevarianceshewasseeing.Inanattempt to understand whathadhappened,SandyaskedCFOSuzySummersformoreinformation.Sheprovidedthefollowing overhead budgets, alongwiththeactualresults for November.

Thecompany purchased 80,900 yards of fabric and used 92,500 yards of fabric duringthemonth. Fabric purchasesduringthe monthweremadeat$2.80peryard.Thedirectlaborpayrollran

$445,900,withanactual hourlyrateof$12.25perdirectlaborhour.Theannualbudgets werebased ontheproduction of589,000shirts,using439,000directlaborhours.Thoughthebudget forNovemberwasbasedon44,400shirts, thecompanyactuallyproduced40,900shirtsduring themonth.

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member