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Accounting Four Exercises




Question;Exercise 11-3Kimm Company has gathered the following information about its product.Direct materials: Each unit of product contains 3.40 pounds of materials. The average waste andspoilage per unit produced under normal conditions is 0.60 pounds. Materials cost $2 per pound,but Kimm always takes the 3.45% cash discount all of its suppliers offer. Freight costs average$0.26 per pound.Direct labor. Each unit requires 2.30 hours of labor. Setup, cleanup, and downtimeaverage 0.29 hours per unit. The average hourly pay rate of Kimms employees is $11.00. Payrolltaxes and fringe benefits are an additional $2.60 per hour.Manufacturing overhead. Overhead is applied at a rate of $4.30 per direct labor hour.Compute Kimms total standard cost per unit. (Round answer to 2 decimal places, e.g. 1.25.)Total standard cost per unit $Exercise 11-6Lewis Companys standard labor cost of producing one unit of Product DD is 3.40 hours at therate of $12.00 per hour. During August, 42,800 hours of labor are incurred at a cost of $12.16 perhour to produce 12,400 units of Product DD.(a) Compute the total labor variance.Total labor variance(b) Compute the labor price and quantity variances.Labor price varianceLabor quantity variance(c) Compute the labor price and quantity variances, assuming the standard is 3.71 hours of directlabor at $12.34 per hour.Labor price varianceLabor quantity varianceProblem 11-1ACostello Corporation manufactures a single product. The standard cost per unit of product isshown below.Direct materials3 pound plastic at $6.64 per poundDirect labor1.50 hours at $12.00 per hourVariable manufacturing overheadFixed manufacturing overheadTotal standard cost per unit$ 19.9218.009.0012.00$58.92The predetermined manufacturing overhead rate is $14 per direct labor hour ($21.00 1.50). Itwas computed from a master manufacturing overhead budget based on normal productionof 7,650 direct labor hours (5,100 units) for the month. The master budget showed total variablecosts of $45,900 ($6.00 per hour) and total fixed overhead costs of $61,200 ($8.00 per hour).Actual costs for October in producing 4,100 units were as follows.Direct materials (12,490 pounds)Direct labor (6,000 hours)Variable overheadFixed overheadTotal manufacturing costs$ 84,43274,34066,03721,903$246,712The purchasing department buys the quantities of raw materials that are expected to be used inproduction each month. Raw materials inventories, therefore, can be ignored.(a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g.125.)Total materials varianceMaterials price varianceMaterials quantityvarianceTotal labor varianceLabor price varianceLabor quantity variance(b) Compute the total overhead variance.Total overhead variance


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