The Following Information Is for the Standard and Actual Costs

question 101

Essay

The following information is for the standard and actual costs for the Happy Corporation.
Standard Costs:
Budgeted units of production - 16,000 (80% of capacity)
Standard labor hours per unit - 4
Standard labor rate - $26 per hour
Standard material per unit - 8 lbs.
Standard material cost - $ 12 per pound
Standard variable overhead rate - $15 per labor hour
Budgeted fixed overhead - $640,000
Fixed overhead rate is based on budgeted labor hours at 80% capacity.
Actual Cost:
Actual production - 16,500 units
Actual material purchased and used - 130,000 pounds
Actual total material cost - $1,600,000
Actual labor - 65,000 hours
Actual total labor costs - $1,700,000
Actual variable overhead - $1,000,000
Actual fixed overhead - $640,000
Actual variable overhead - $1,000,000
Determine: (a) the quantity variance, price variance, and total direct materials cost variance; (b) the time variance, rate variance, and total direct labor cost variance; and (c) the volume variance, controllable variance, and total factory overhead cost variance.

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Definitions:

Philosophy

The study of fundamental questions about existence, knowledge, values, reason, mind, and language.

Operant Conditioning

An approach to learning where behavioral potency is changed through the implementation of incentives or consequences.

Classical Conditioning

A learning process in which two stimuli are repeatedly paired; a response that is initially elicited by the second stimulus is eventually elicited by the first stimulus alone.

Contingency Management

A behavior modification technique that involves changing behavior by modifying the consequences, typically through rewards or punishments, that follow that behavior.