Q:
Kimm Company has gathered the subsequent information about its product.
Direct materials: Every unit of product contains 3.60 pounds of materials. The average spoilage and waste per unit produced under normal conditions is 0.40 pounds. Materials cost $3 per pound, but Kimm always takes the 4.54 percent cash discount all of its suppliers offer. Freight costs average $0.44 per pound.
Each unit needs 1.40 hours of labor. Setup, cleanup, and downtime average 0.22 hours per unit. The average hourly pay rate of Kimm's employees is $13.70. Fringe benefits and Payroll taxes are an additional $3.80 per hour.
Manufacturing overhead. Overhead is applied at a rate of $6.90 per direct labor hour.
Evaluate Kimm's total standard cost per unit.
Total standard cost per unit $
Lewis Company's standard labor cost of producing one unit of Product DD is 3.50 hours at the rate of $12.00 per hour. In August, 40,400 hours of labor are incurred at a cost of $12.13 per hour to produce 11,400 units of Product DD.
(a) Evaluate the total labor variance.
(b) Evaluate the labor price and quantity variances.
(c) Determine the labor price and quantity variances, consider the standard is 3.82 hours of direct labor at $12.27 per hour.
a Costello Corporation manufactures a particular product. The standard cost per unit of product is given below.
Direct materials-3 pound plastic at $6.90 per pound $ 20.70
Direct labor-2.50 hours at $12.00 per hour 30.00
Variable manufacturing overhead 20.00
Fixed manufacturing overhead 10.00
Total standard cost per unit $80.70
The pre-evaluated manufacturing overhead rate is $12 per direct labor hour ($30.00 ÷ 2.50). It was evaluated from a master manufacturing overhead budget based on normal production of 13,500 direct labor hours (5,400 units) for the month. The master budget showed net variable costs of $108,000 ($8.00 per hour) and net fixed overhead costs of $54,000 ($4.00 per hour). Actual costs for October in producing 3,700 units were as given.
Direct materials (11,230 pounds) $ 79,845
Direct labor (9,060 hours) 110,713
Variable overhead 83,581
Fixed overhead 29,699
Total manufacturing costs $303,838
The purchasing department purchases the quantities of raw materials that are expected to be used in production every month. Raw materials inventories, thus, can be ignored.
(a) Evaluate all of the materials and labor variances.
Total materials variance
Materials price variance
Materials quantity variance
Total labor variance
Labor price variance
Labor quantity variance
(b) Determine the total overhead variance.
Total overhead variance