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Quilter Company_ standard cost and analyzing variances

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Question;Question 8-27A Computing;standard cost and analyzing variances.;Quilter;Company manufactures molded candles that are finished by hand. The company;developed the following standards for a new line of drip candles;During;2010, Quilter planned to produce 30,000 drip candles. Production lagged behind;expectations, and it actually produced only 24,000 drip candles. At year-end, direct;materials purchased and used amounted to 40,000 pounds at a unit price of $.54;per pound. Direct labor costs were actually $7.50 per hour and 26,400 actual;hours were worked to produce the drip candles. Overhead for the year actually;amounted to $132,000. Overhead is applied to products using a predetermined;overhead rate based on estimated units.;Required;(Round;all computations to two decimal places);a.;Compute the standard cost per candle for direct materials, direct labor, and;overhead.;b.;Determine the total standard cost for one drip candle.;c.;Compute the actual cost per candle for direct materials, direct labor, and;overhead.;d.;Compute the total actual cost per candle.;e.;Compute the price and usage variances for direct materials and direct labor.;Identify any variances that Quilter should investigate. Offer possible cause(s);for the variances.;f.;Compute the fixed cost spending and volume variance. Explain your findings?;g.;Although the individual variances (prices, usage, and overhead) were large, the;standard cost per unit and the actual cost per unit differed by only a few;cents. Explain why?

 

Paper#37282 | Written in 18-Jul-2015

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