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Preston manufactures coffee mugs that it sells to other companies for customizing with their own logos. Preston prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 59,900 coffee mugs per month: (Click the icon to view the cost data.) Actual cost and production information for July 2018 follows: Click the icon to view actual cost and production information.) Read the requirements Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ actual quantity: FOH fixed overhead: SC standard cost sa standard quantity) Formula Variance Direct materials cost variance (AC-SC)xAQ - $ 800 F Direct labor cost variance (AC-SC) AQ - $ 5,970' U Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U) (Abbreviations used: AC actual cost; AQ actual quantity: FOHfixed overhead: SC standard cost SQ standard quantity) Direct materials efficiency variance Direct labor efficiency variance (AQ - SQ)X SC (AQ - SQ)X SC Choose from any list or enter any number in the input fields and then click Check Answer Clear All Check Answer 1 remaining 1 of 1 (1 complete) other companies for customizing with their own a standard cost system to control manufacturing acturing ased on static budget volume of 59,900 coffee Actual cost and production information for Ju A (Click the in (Click the icon to view actual cost and pre Read the requirements. * More Info a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,600 coffee mugs. C. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per Ib. d. Actual direct labor usage was 199,000 minutes at a total cost of $33,830. e. Actual overhead cost was $10,945 variable and $29.455 fixed. f. Selling and administrative costs were $115,000. Print Done in the input fields and then click Check Answer. Clear All tandard cost system to control manufacturing on static hudaet volume of 59.900.coffee Aliud UST and production information for J (Click the icon to view actual cost and p i Requirements TY in 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. Preston intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? ed Print Done input fields and then click Check Answer. Clear All 1 of 1 (1 complete) nies for customizing with their own cost system to control manufacturing budget volume of 59,900 coffee Actual cost and production information for July 2018 folk A (Click the icon to view actual cost and production inf Read the requirements i Data Table $ 0.05 0.42 Direct Materials ( 0.2 lbs @ $ 0.25 per lb) Direct Labor ( 3 minutes @ $ 0.14 per minute) Manufacturing Overhead: Variable ( 3 minutes @ $ 0.06 per minute) $ Fixed (3 minutes @ $ 0.15 per minute) Total Cost per Coffee Mug 0.18 0.45 $ 0.63 1.10 org 11E000 Print Done elds and then click Check Answer. Clear All Actual cost and production Information for July 2018 follows: (Click the icon to view actual cost and production Information.) Preston manufactures coffee mugs that it sells to other companies for customizing with their own logos. Preston prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 59,900 coffee mugs per month: (Click the icon to view the cost data.) Read the requirements Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost: AQ - actual quantity, FOH - fixed overhead: SC = standard cost; SQ = standard quantity.) Variance Direct materials cost variance Formula (AC-SC)XAQ (AC-SC)XAQ F 800 5,970 Direct labor cost variance U Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ - actual quantity, FOH = fixed overhead: SC - standard cost; SQ - standard quantity.) Variance D Direct materials efficiency variance Direct labor efficiency variance = = Formula (AQ - SQ) x SC (AQ - SQ)X SCENE Choose from any list or enter any number in the input fields and then click Check Answer. Check Answer 11 parts Clear All 11 remaining sells to other companies for customizing -xible budgets and uses a standard cost he standard unit cost of a coffee mug is coffee mugs per month: Actual cost and production informatic (Click the icon to view actual cos Read the requirements. i Requirements 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. Preston intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? 4. Print Done mber in the input fields and then click Check Answer Clear All i More Info . a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,600 coffee mugs. c. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 199,000 minutes at a total cost of $33,830. e. Actual overhead cost was $10,945 variable and $29,455 fixed. f. Selling and administrative costs were $115,000. on ad iand Print [ Done ter any number in the input fields and then click Check Answer. of 59,900 coffee mugs per month: cost data.) Read the requirements. cost i Data Table Seleo ). (AL $ 0.05 0.42 Direct Materials ( 0.2 lbs @ $ 0.25 per lb) Direct Labor minutes @ $ 0.14 per minute) Manufacturing Overhead: Variable ( 3 minutes @ $ 0.06 per minute) $ Fixed (3 minutes @ $ 0.15 per minute) compy # actu 0.18 0.45 0.63 $ 1.10 Total Cost per Coffee Mug Fiance Print Done nr om numhor in the innut fields and then click Check