Questions -
Q1. Vintech Company is planning to produce 2,100 units of product in 2011. Each unit requires 4 pounds of materials at $7 per pound and a half hour of labor at $14 per hour. The overhead rate is 70% of direct labor.
Compute the budgeted amounts for 2011 for direct materials to be used, direct labor, and applied overhead.
Compute the standard cost of one unit of product.
Q2. The standard cost of Product B manufactured by TLC Company includes 3 units of direct materials at $5.90 per unit. During June, 28,000 units of direct materials are purchased at a cost of $5.55 per unit, and 28,000 units of direct materials are used to produce 9,000 units of Product B.
Compute the total materials variance and the price and quantity variances.
Repeat the question above, assuming the purchase price is $6.14 and the quantity purchased and used is 26,200 units.
Q3. Kendra Company's standard labor cost of producing one unit of Product DD is 4 hours at the rate of $13.56 per hour. During August, 40,800 hours of labor are incurred at a cost of $13.67 per hour to produce 10,000 units of Product DD.
Compute the total labor variance.
Compute the labor price and quantity variances.
Repeat the previous question, assuming the standard is 4.2 hours of direct labor at $13.84 per hour.
Q4. Winters Company uses a standard cost system. During January, the company reported the following manufacturing variances.
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Materials price variance
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$1,500 U
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Labor quantity variance
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$ 760 U
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Materials quantity variance
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740 F
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Overhead variance
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860 U
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Labor price variance
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550 U
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In addition, 9,140 units of product were sold at $8.00 per unit. Each unit sold had a standard cost of $6.00. Selling and administrative expenses were $6,900 for the month.
Prepare an income statement for management for the month ended January 31, 2011.