(Appendix 10B)The Following Is the Standard Cost Card for X

question 88

Essay

(Appendix 10B)The following is the standard cost card for X Company's only product:
The company manufactured and sold 18,000 units of product during the year.A total of 70,200 metres of material was purchased during the year at cost of $4.20 per metre.All of this material was used to manufacture the 18,000 units.The company records showed no beginning or ending inventories for the year.
The company worked 29,250 direct labour hours during the year at a cost of $9.75 per hour.Overhead cost is applied to products on the basis of direct labour hours.The denominator activity level (direct labour hours)was 22,500 hours.Budgeted fixed overhead costs as shown on the flexible budget were $157,500,while actual fixed overhead costs were $156,000.Actual variable overhead costs were $90,000.
Required:
a)Compute the direct materials price and quantity variances for the year.
b)Compute the direct labour 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)(Appendix 10B)Prepare a journal entry to record the variable overhead costs incurred and applied,including the results of the variance analysis.
f)(Appendix 10B)Prepare a journal entry to record the fixed overhead costs incurred and applied,including the results of the variance analysis.

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Definitions:

Ownership

The legal right to possess, use, control, and dispose of property, assets, or resources.

Seniority

The status obtained by an employee based on length of service or tenure, often affecting promotions, layoffs, and other job-related benefits.

Personal Property

Moveable property that is not fixed permanently to one location, such as furniture, vehicles, and electronic goods, as opposed to real estate.

Ownership Rights

Legal entitlements associated with possessing property, including the rights to use, rent, sell, or transfer it.