#### Details of this Paper

##### PROBLEM 11-9. Comprehensive Variance Problem [LO 2...

Description

Solution

Question

PROBLEM 11-9. Comprehensive Variance Problem [LO 2,3,4] Bowser Products operates a small plant in New Mexico that produces dog food in batches of 1,200 pounds. The product sells for \$4 per pound. Standard costs for 2012 are: Standard direct labor cost = \$16 per hour Standard direct labor hours per batch = 9 hours Standard price of material A = \$0.25 per pound Standard pounds of material A per batch = 900 pounds Standard price of material B = \$0.45 per pound Standard pounds of material B per batch = 300 pounds Fixed overhead cost per batch = \$500 At the start of 2012, the company estimated monthly production and sales of 50 batches. The company estimated that all overhead costs were fixed and amounted to \$25,000 per month. During the month of June 2012 (typically a somewhat slow month), 40 batches were produced (not an unusual level of production for June). The following cost were incurred: Direct labor costs were \$6,800 for 400 hours. 36,500 pounds of material A costing \$7,300 were purchased and used. 12,000 pounds of material B costing \$5,520 were purchased and used. Fixed overhead of \$24,400 was incurred. a. Calculate variances for material, labor, and overhead. b. Prepare a summary of the variances. Does the unfavorable overhead volume variance suggest that overhead cost are out of control?

Paper#13535 | Written in 18-Jul-2015

Price : \$25