Tiger, Inc The Standard Cost Per Unit When Operating at This Same

question 200

Essay

Tiger, Inc. budgeted the following overhead costs for the current year assuming operations at 80% of capacity, or 40,000 units:
$$\begin{array} { l | c } \text { Total variable overhead } \ldots \ldots \ldots \ldots \ldots \ldots & \$ 240,000 \\\hline \text { Total fixed overhead } \ldots \ldots \ldots \ldots \ldots \ldots & \underline { \mathbf { 5 6 0 , 0 0 0 } } \\\hline \text { Total overhead } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \$ 800,000\end{array}$$ The standard cost per unit when operating at this same 80% capacity level is:
$\begin{array}{|l|c|}\hline \text { Direct materials (5 lbs. @\$4/1b.) }& \$ 20.00 \\\hline \text { Direct labor (2 hrs. @ \$8.75 hr.) } & 17.50 \\\hline \text { Variable overhead (2 hrs. @ \$3/hr.) } & 6.00 \\\hline \text { Fixed overhead (2 hrs. @\$7hr.) } & 14.00 \\\hline\text { Total cost per unit }&\$57.50\end{array}$ The actual production achieved in the current year was 60% of capacity, or 30,000 units. The actual costs were:
$$\begin{array} { l | l } \text { Direct materials } ( 150,350 \text { lbs.) } \ldots \ldots \ldots \ldots \ldots & \$ 616,435 \\\hline \text { Direct labor } ( 59,800 \text { hrs.) } \ldots \ldots \ldots \ldots \ldots \ldots & 520,260 \\\hline \text { Variable overhead } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 192,000 \\\hline \text { Fired overhead } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 552,000\end{array}$$ Calculate the following variances and indicate whether each is favorable or unfavorable.
$\begin{array} { l | l } \text { Direct materials: } & \\\hline \text { Price variance } & \\\hline \text { Quantity variance } & \\\hline \text { Direct labor: } & \\\hline \text { Rate variance } & \\\hline\end{array}$
$\begin{array} { l | l } \hline \text { Efficiency variance } & \\\hline \text { Variable overhead: } & \\\hline \text { Spending variance } & \\\hline \text { Efficiency variance } & \\\hline \text { Fixed overhead: } & \\\hline \text { Spending variance } & \\\hline \text { Volume variance } &\end{array}$

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Definitions:

Tactile Fremitus

A vibration felt on the chest wall during speech, which can indicate abnormalities in or around the lungs.

Adventitious Sounds

Unusual or abnormal sounds heard during a respiratory examination, indicating potential lung issues.

Dull Percussion

A term used in clinical examinations to describe a thudding sound produced when tapping over dense tissue areas, often indicative of underlying pathology.

Diaphragmatic Excursion

The movement of the diaphragm during breathing, indicating its functionality and health.