Question - Smart Hearing manufacturing headphone cases. During September 2016, the company produced and sold 108,000 cases and recorded the following cost data:
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Standard Cost Information
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Quantity
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Cost
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Direct Materials
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2 parts
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$0.16 per part
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Direct Labor
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0.02 hours
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8.00 per hour
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Variable Manufacturing Overhead
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0.02 hours
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9.00 per hour
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Fixed Manufacturing Overhead ($33,320 for static budget volume of 98,000 units and 1,960 hours, or $17 per hour)
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Actual Cost Information
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Direct Materials
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(212,000 parts @ $2.21 per part)
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$44,520
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Direct Labor
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(1,660 hours @ $8.15 per hour)
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13,529
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Variable Manufacturing Overhead
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8,000
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Fixed Manufacturing Overhead
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31,000
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Requirements -
1) Compute the cost and efficiency variances for direct materials and direct labor.
2) For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.