Upton Company Uses a Standard Cost System for Its Single

question 31

Essay

Upton Company uses a standard cost system for its single product.The following data are available:
Actual experience for the current year:

$\begin{array}{|l|r|}\hline \text { Purchases of raw materials }(15,000 \text { yards at } \\\$ 13 \text { per yard) } & \$ 195,000 \\\text { Raw materials used } & 12,000 \\&\text { yards}\\\hline \text { Direct labor costs }(10,200 \text { hours at } \$ 10 \text { per } \\\text { hour) } & \$ 102,000 \\\text { Actual variable overhead cost } & \$ 84,150 \\\hline \text { Units produc ed } & 12,600 \\&\text { Units}\\\hline\end{array}$ Standards per unit of product: $\begin{array}{|l|r|}\hline \text { Raw materials } & 1.1 \text { yards at } \$ 15 \text { per yard } \\\hline \text { Direct labor } & 0.80 \text { hours at } \$ 9.50 \text { per hour } \\\hline \text { Variable overhead } & \$ 8 \text { per direct labor hour } \\\hline\end{array}$ Required:
Compute the following variances for raw materials,direct labor,and variable overhead,assuming that the price variance for materials is recognized at point of purchase:
a.Direct materials price variance.b.Direct materials quantity variance.c.Direct labor rate variance.d.Direct labor efficiency variance.e.Variable overhead rate variance.f.Variable overhead efficiency variance.

Interpret and solve for net operating income under different scenarios.

Grasp the impact of cost behavior on budgeting and performance evaluation.

Distinguish between favorable and unfavorable variances and their implications for management.

Apply budgeting concepts to various scenarios including service companies, cleaning and maintenance operations, and medical clinics.

---

Definitions:

Legal Requirements

Obligations imposed by law on individuals, companies, or other entities to adhere to certain rules or regulations.

HR Professional

A person skilled in managing employee relations, compensations, benefits, recruitment, and ensuring compliance with labor laws within an organization.

Comparable Worth

A principle in employment compensation asserting that jobs should be paid based on their value or worth rather than job titles or traditional gender roles.

Dissimilar Jobs

Positions or tasks that are distinctly different in nature, requiring unique skills and capabilities.