#### Details of this Paper

##### Sterling Company_standard cost system

Description

solution

Question

Question;1.;The Sterling Company uses a standard cost system in which manufacturing;overhead costs are applied to the units of the company?s single product on the;basis of direct labor-hours (DLHs). The;standard cost card for the product follows;Standard Cost Card-per;unit of product;Direct materials, 4 yards at \$3.50 per;yard \$14;Direct labor, 1.5 DLHs at \$8 per DLH 12;Variable overhead, 1.5 DLHs at \$2 per;DLH 3;Fixed overhead, 1.5 DLHs at \$6 per DLH 9;The following data pertain to last;year?s activities;-;The company manufactured 18,000 units of product during the year.;-;A total of 70,200 yards of;material was purchased during the year at a cost of \$3.75 per yard. All of this material was used to manufacture;the 18,000 units.;-;The company worked 29,250 direct labor hours during the year at a cost;of \$7.80 per hour.;-;The denominator activity level was 22,500 direct labor hours.;-;Budgeted fixed manufacturing overhead costs were \$135,000 while actual;manufacturing overhead costs were \$133,200.;-;Actual variable manufacturing overhead costs were \$61,425.;Required (15;points);a. Compute the direct;materials price and quantity variances for the year.;b. Compute the direct labor;rate and efficiency variances for the year.;c. Compute the variable;overhead spending and efficiency variances for the year.;d. Compute the fixed overhead;budget and volume variances for the year.;e. Discuss some possible;reasons for the direct labor variances that you computed.

Paper#37914 | Written in 18-Jul-2015

Price : \$20