Sole Purpose Shoe Company

Sole Purpose Shoe Company is owned and operated by SarahCharles. The company manufactures casual shoes, with manufacturingfacilities in your state. Sarah began the business this year, andwhile she has a great deal of experience in manufacturing popularand comfortable shoes, she needs some help in evaluating herresults for the year, and asks for your help.

Under normal conditions, Sarah spends $8.40 per unit ofmaterials, and it will take 3.6 units of material per pair ofshoes. During July, Sole Purpose Shoe Company incurred actualdirect materials costs of $63,101 for 7,090 units of directmaterials in the production of 2,175 pairs of shoes.

Complete the following table, showing the direct materialsvariance relationships for July for Sole Purpose Shoe Company. Ifrequired, round your answers to two decimal places. When enteringvariances, use a negative number for a favorable cost variance

A variance that occurs when the actual cost is less thanstandard cost.

, and a positive number for an unfavorable cost variance

A variance that occurs when the actual cost exceeds the standardcost.

.

Actual Cost								Standard Cost
Actual Quantity	X	Actual Price		Actual Quantity	X	Standard Price		Standard Quantity	X	Standard Price
	X				X
	=				=				=
			selector 1 Favorable Unfavorable Direct Materials selector 2 Price Rate Cost Quantity Time Variance:				selector 3 Favorable Unfavorable Direct Materials selector 4 Price Cost Rate Time Quantity Variance:
					selector 5 Favorable Unfavorable Total Direct Materials selector 6 Price Cost Time Rate Quantity Variance:
You are in Column Actual Cost	You are in Column Actual Cost	You are in Column Actual Cost						You are in Column Standard Cost	You are in Column Standard Cost	You are in Column Standard Cost

Points:

0 / 18

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Review Exhibit 6

Under normal conditions, Sarah pays her employees $8.50 perhour, and it will take 2.8 hours of labor per pair of shoes. DuringAugust, Sole Purpose Shoe Company incurred actual direct laborcosts of $65,148 for 7,320 hours of direct labor in the productionof 2,300 pairs of shoes.

Complete the following table, showing the direct labor variancerelationships for August for Sole Purpose Shoe Company. Ifrequired, round your answers to two decimal places. When enteringvariances, use a negative number for a favorable variance, and apositive number for an unfavorable variance.

Actual Cost								Standard Cost
Actual Hours	X	Actual Rate		Actual Hours	X	Standard Rate		Standard Hours	X	Standard Rate
	X				X
	=				=				=
			selector 1 Favorable Unfavorable Direct Labor selector 2 Cost Time Price Rate Quantity Variance:				selector 3 Favorable Unfavorable Direct Labor selector 4 Cost Quantity Time Rate Price Variance:
					selector 5 Unfavorable Favorable Total Direct Labor selector 6 Time Rate Price Cost Quantity Variance:
You are in Column Actual Cost	You are in Column Actual Cost	You are in Column Actual Cost						You are in Column Standard Cost	You are in Column Standard Cost	You are in Column Standard Cost

Points:

0 / 18

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Review Exhibit 7 in the text.

Shaded cells have feedback.

Sarah has learned a lot from you over the past two months, andhas compiled the following data for Sole Purpose Shoe Company forSeptember using the techniques you taught her. She would like yourhelp in preparing a Budget Performance Report

A report comparing actual results with budget figures.

for September. The company produced 2,500 pairs of shoes thatrequired 8,750 units of material purchased at $8.20 per unit and6,750 hours of labor at an hourly rate of $8.90 per hour during themonth. Actual factory overhead during September was $21,000. Whenentering variances, use a negative number for a favorable costvariance, and a positive number for an unfavorable costvariance.

Use the data in the following table to prepare the BudgetPerformance Report for Sole Purpose Shoe Company for September.

Manufacturing Costs	Standard Price	Standard Quantity	Standard Cost Per Unit
Direct materials	$8.40 per unit	3.6 units per pair	$30.24
Direct labor	$8.50 per hour	2.8 hours per pair	23.80
Factory overhead	$2.80 per hour	2.8 hours per pair	7.84
You are in Column Manufacturing Costs Total standard cost perpair	You are in Column Standard Price	You are in Column Standard Quantity	$61.88You are in Column Standard Cost Per Unit

Question not attempted.

Score: 0/48

Sole Purpose Shoe Company

Budget Performance Report

For the Month Ended September 30

1	Manufacturing Costs	Actual Costs	Standard Cost at Actual Volume	Cost Variance - (Favorable) Unfavorable
2	Direct materials
3	Direct labor
4	Factory overhead
5	Total manufacturing costs

Solution

Sole Purpose Shoe Company

Budget Performance Report

For the Month Ended September 30

1	Manufacturing Costs	Actual Costs	Standard Cost at Actual Volume	Cost Variance - (Favorable) Unfavorable
2	Direct materials
3	Direct labor
4	Factory overhead
5	Total manufacturing costs

Points:

0 / 12

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Check My Work

Review Exhibit 3 and computations for the amounts in thereport.

in the text.