Skyline manufactures a single product. The standard cost of one unit of this product is...
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Accounting
Skyline manufactures a single product. The standard cost of one unit of this product is as follows
Direct materials: 5 feet at $1 per foot
$ 5.00
Direct labor: 1 hour at $4.50 per hour
4.50
Variable manufacturing overhead: 1 hour at $3 per hour
3.00
Total standard variable cost per unit
$12.50
During October, 5,500 units were produced. Selected data relating to the months production
follow:
Material purchased: 50,000 feet at $0.95 per foot
$47,500
Material used in production: 28,000 feet
Direct labor: 6,000 hours at $4.30 per hour
$25,800
Variable manufacturing overhead cost incurred
$20,475
There was no beginning inventory of raw materials. The variable manufacturing overhead rate
is based on direct labor-hours.
Required:
1. For direct materials: (2marks)
a. Compute the price and quantity variances for October.
b. Prepare journal entries to record activity for October.
2. For direct labor: (2marks)
a. Compute the rate and efficiency variances for October.
b. Prepare a journal entry to record labor activity for October.
3. For variable manufacturing overhead: (1mark)
a. Compute the spending and efficiency variance for October.
follows
Direct materials: 5 feet at $1 per foot | $ 5.00 |
Direct labor: 1 hour at $4.50 per hour | 4.50 |
Variable manufacturing overhead: 1 hour at $3 per hour | 3.00 |
Total standard variable cost per unit | $12.50 |
During October, 5,500 units were produced. Selected data relating to the months production
follow:
Material purchased: 50,000 feet at $0.95 per foot | $47,500 |
Material used in production: 28,000 feet |
|
Direct labor: 6,000 hours at $4.30 per hour | $25,800 |
Variable manufacturing overhead cost incurred | $20,475 |
There was no beginning inventory of raw materials. The variable manufacturing overhead rate
is based on direct labor-hours.
Required:
1. For direct materials: (2marks)
a. Compute the price and quantity variances for October.
b. Prepare journal entries to record activity for October.
2. For direct labor: (2marks)
a. Compute the rate and efficiency variances for October.
b. Prepare a journal entry to record labor activity for October.
3. For variable manufacturing overhead: (1mark)
a. Compute the spending and efficiency variance for October.
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