Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

problem: Western Company manufactures special electrical machine and parts. The company uses a standard cost system with separate standards established for every product.

The transformer department manufactures a special transformer. This department measures production volume in direct labor hours & uses a flexible budget system to plan & control department overhead costs.

Standard costs for the special transformers are determined yearly in September for the coming year. The standard value of a transformer at its DeCatur plant for the year just completed is $67 per unit, as shown here:

Direct Materials

 

 

Iron

5 Sheets X $2

$10

Copper

3 Spools X $3

$9

Direct Labor

4 hours X $7

$28

Variable Overhead

4 hours X $3

$12

Fixed Overhead

4 hours X $2

$8

Total

 

$67

Overhead rates were based on practical capacity of 4000 direct labor hours per month. Variable overhead costs are expected to vary with the number of Direct labor hours actually used. During October, the plant produced 800 transformers. This number was below expectations because a work stoppage occurred during labor contract negotiations. When the contract was settled, the department scheduled overtime in an attempt to reach expected production levels. The following costs were incurred in October.

Direct Material
Iron Purchased 5000 sheets at $2/sheet and used 3900 sheets
Copper Purchased 2200 spolls at 3.10/spool and used 2600 spools

Direct Labor
Regular Time: 2000 hours at $7.00 and 1400 hours at $7.20
Overtime 600 of the 1400 hours were subject to overtime premium. The total overtime premium of $2160 is included in variable overhead in accordance with company accounting practices

Factory Overhead
Variable $12,000
Fixed $8,800

[A] find out total direct materials price variance
[B] find out total direct usage variance
[C] Determine the variable overhead spending variance
[D] Determine the variable overhead efficiency variance
[E] Determine the budget (spending) variance for fixed overhead
[F] Determine the production volume variance
[G] Determine the most appropriate time to record any variance of actual materials prices from standard? describe?
[H] Determine the total direct labor rate (price) variance 
[I] Determine the total direct labor efficiency variance

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M921771

Have any Question? 


Related Questions in Accounting Basics

Exercise recording receivables and identifying their effect

Exercise: Recording receivables and identifying their effect on financial statements Davos Company performed services on account for $160,000 in 2016. Davos collected $120,000 cash from accounts receivable during 2016, a ...

Effect of financing on earnings per sharethree different

Effect of Financing on Earnings Per Share Three different plans for financing a $4,400,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their ...

Problem 1conceptual leasing bought a grader for 600000 and

Problem 1 "Conceptual Leasing bought a grader for $600,000 and the leased it back to Parole Inc. on January 1, 2011. The description of the lease follows: • Quarterly Rent Payments=$34,000 • Leaser term= 4 years (16 quar ...

How much did you borrow for your house if your monthly

How much did you borrow for your house if your monthly mortgage payment for a 30 year mortgage at 6.65% APR is $1,600?? A $218,080 B $202,503 C $186,926 D $233,658 E $249,235 F $264,812 Shady Rack Inchas a bond outstandi ...

Accounting discussion questionbulluse the internet to

Accounting Discussion Question • Use the Internet to research an annual report of a retail company. • Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or credit ...

Accountingbulluse the internet to research an annual report

Accounting • Use the Internet to research an annual report of a retail company. • Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or creditor with the most imp ...

Questiona not-for-profit organization receives a restricted

Question: A not-for-profit organization receives a restricted gift. When, and in which type of fund, should it recognize the revenue? When, and in which type of fund, should it recognize the related expense? What is the ...

Garner company began operations on january 1 2010 and uses

Garner Company began operations on January 1, 2010, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2013. The following information is available for th ...

Course project a financial statement analysisa comparative

Course Project: A Financial Statement Analysis A Comparative Analysis of Nike, Inc. and Under Armour, Inc. Below is the link for the financial statements for Nike, Inc. for the fiscal year ending 2014. First, select 2014 ...

Transactions and fasb standards1 the new city college

Transactions and FASB Standards 1. The New City College reported deferred revenues of $612,000 as of July 1, 2014, the first day of its fiscal year. Record the following transactions related to student tuition and fees a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen