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Straightforward variance analysis




Straightforward variance analysis;Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows.;Direct materials: 4 units @ $6.50 $26.00;Direct labor: 8 hours @ $8.50 68;Variable factory overhead: 8 hours@ $7.00 56;Fixed factory overhead: 8 hours @ 2.520;Total standard cost per unit $170.00;The following information pertains to activity for December;1.Direct materials acquired during the month amounted to 26,350 units at $6.40 per unit. All materials were consumed in operations.;2.Arrow incurred an average wage rate of $8.75 for 51,400 hours of activity.;3.Total overhead incurred amounted to $508,400. Budgeted fixed overhead totals $1.8 million and is spread evenly throughout the year.;4.Actual production amounted to 6,500 completed units.;a. compute Arrows direct material variances;b. Compute Arrows direct labor variances.;c. Compute Arrows variances for factory overhead


Paper#81672 | Written in 18-Jul-2015

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