Problem 1
During July, PK's Fine Feline Foods produced 147 batches of its gourmet kitten formula. Each batch weighs 1,000 pounds. To produce this quantity of output, the company purchased and used 148,450 pounds of direct material at a total cost of $ 593,800. It also incurred direct labor costs of $ 17,600 for the 2,200 hours worked by employees on the kitten formula crew. Manufacturing overhead incurred during July totaled $ 3,625 of which $ 2,450 was considered fixed. Standard cost information per 1,000-pound batch of kitten formula follows:
Direct materials - $ 4.20 per pound
Standard quantity allowed per batch - 1,020 pounds
Direct labor rate - $ 8.50 per hour
Standard hours allowed per batch - 14 D/L hours
Budgeted fixed overhead - $ 2,800 per month
Budgeted level of production - 140 batches per month
Overhead application rate:
Fixed (2,800 / 140 batches) 20 per batch
Variable (140 batches) 9 per batch
Total 29 per batch
Compute the following:
direct materials cost and efficiency variances
direct labor costand efficiency variances
variable overhead cost and efficiency variances
fixed overhead cost and volume variances
Problem 2
Maksy Manufacturing uses a standard cost accounting system and produced 32,000 units this past year. Each unit took several pounds of direct materials and 1.25 standard hours of direct labor at a standard hourly rate of $ 12.00. Budgeted activity was 50,000 direct labor hours. During the year, 133,000 pounds of raw materials were purchased at $0.92 per pound and used in the production. (Hint: Set up the 3-column format to compute variances; input the numbers given and back into the unknown amounts. Have fun!)
a. If the direct materials cost variance was $ 3,990 favorable, what was the standard materials cost per pound?
b. If the direct materials efficiencyvariance was $ 1,710 unfavorable, what was the standard materials quantity per unit?
c. What were the standard hours allowed for the units produced?
d. If the direct labor efficiency variance was $ 7,200 unfavorable, what were the actual direct labor hours worked?
e. If the direct labor cost variance was $ 6,090 favorable, what was the actual rate per hour?