60.1K

Verified Solution

Link Copied!

Stuart Manufacturing Company produces a component part of a top secret military communication device. Standard production and

cost data for the part, Product $x,$ follow:

Stuart purchased and used $45,850$ pounds of material at an average cost of $$2\mathrm{.}45$ per pound. Labor usage amounted to $73,990$ hours

at an average of $$8\mathrm{.}23$ per hour. Actual production amounted to $27,700$ units. Actual fixed overhead costs amounted to $$663,400.$ The

company completed and sold all inventory for $$1,960,000.$

Required

a$.$ Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual

quantity.

b$.$ Calculate the materials price and usage variances. Indicate whether the variances are favorable $($F$)$ or unfavorable $($U$).$

c$.$ Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.

d$.$ Calculate the labor price and usage variances. Indicate whether the variances are favorable $($F$)$ or unfavorable $($U$).$

e$.$ Calculate the predetermined overhead rate, assuming that Stuart uses the number of units as the allocation base.

f$.$ Calculate the fixed cost spending and volume variances and indicate whether they are favorable $($F$)$ or unfavorable $($U$).$

g$.$ Determine the amount of gross margin Stuart would report on the year$-$end income statement.

Complete this question by entering your answers in the tabs below.

Required C

Required $F$

Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the

actual quantity.

Answer & Explanation Solved by verified expert

See Answer