Helix Company produces costumes used in the television and movieindustries. Recently the company received an ongoing order forSamurai robes to be worn in an upcoming Japanese historical actionseries made for television. The company uses a standard costingsystem to assist in the control of costs. According to thestandards set for these robes, the factory has a denominatoractivity level of 855 direct labour-hours each month, which shouldresult in the production of 2,850 robes. The standard costsassociated with this level of production are as follows:
Total Per Unit of Product Directmaterials $ 64,125 $ 22.50 Direct labour $ 5,985 2.10 Variablemanufacturing overhead* $ 2,565 0.90 Fixed manufacturingoverhead* $ 2,565 0.90 $ 26.40 *Based on directlabour-hours
DuringApril, the factory worked only 835 direct labour-hours and produced3,000 robes. The following actual costs were recorded during themonth:
Total Per Unit of Product Direct materials(9,500 metres) $ 66,900 $ 22.30 Direct labour $ 6,900 2.30 Variablemanufacturing overhead $ 9,300 3.10 Fixed manufacturingoverhead $ 2,400 .80 $ 28.50
At standard, each robe shouldrequire 3.0 metres of material. All of the materials purchasedduring the month were used in production.
Required:
Compute the followingvariances for April: 1. The materials price and quantity variances. (Do notround intermediate calculation. Indicate the effect of eachvariance by selecting "F" for favourable, "U" for unfavourable, and"None" for no effect (i.e., zero variance).)
2. The labour rate and efficiency variances. (Do not roundintermediate calculation. Indicate the effect of each variance byselecting "F" for favourable, "U" for unfavourable, and "None" forno effect (i.e., zero variance).)
3. The variable manufacturing overhead spending and efficiencyvariances. (Do not round intermediate calculation. Indicatethe effect of each variance by selecting "F" for favourable, "U"for unfavourable, and "None" for no effect (i.e., zerovariance).)
4. The fixed manufacturing overhead budget and volume variances.(Do not round intermediate calculation. Indicate the effectof each variance by selecting "F" for favourable, "U" forunfavourable, and "None" for no effect (i.e., zerovariance).)
Helix Company produces costumes used in the television and movieindustries. Recently the company received an ongoing order forSamurai robes to be worn in an upcoming Japanese historical actionseries made for television. The company uses a standard costingsystem to assist in the control of costs. According to thestandards set for these robes, the factory has a denominatoractivity level of 855 direct labour-hours each month, which shouldresult in the production of 2,850 robes. The standard costsassociated with this level of production are as follows: |
| Total | Per Unit of Product | |||
| Directmaterials | $ | 64,125 | $ | 22.50 |
| Direct labour | $ | 5,985 | 2.10 | |
| Variablemanufacturing overhead* | $ | 2,565 | 0.90 | |
| Fixed manufacturingoverhead* | $ | 2,565 | 0.90 | |
| $ | 26.40 | |||
| *Based on directlabour-hours | ||||
| DuringApril, the factory worked only 835 direct labour-hours and produced3,000 robes. The following actual costs were recorded during themonth: |
| Total | Per Unit of Product | |||
| Direct materials(9,500 metres) | $ | 66,900 | $ | 22.30 |
| Direct labour | $ | 6,900 | 2.30 | |
| Variablemanufacturing overhead | $ | 9,300 | 3.10 | |
| Fixed manufacturingoverhead | $ | 2,400 | .80 | |
| $ | 28.50 | |||
| At standard, each robe shouldrequire 3.0 metres of material. All of the materials purchasedduring the month were used in production. |
| Required: |
| Compute the followingvariances for April: | |||||||||
| 1. | The materials price and quantity variances. (Do notround intermediate calculation. Indicate the effect of eachvariance by selecting "F" for favourable, "U" for unfavourable, and"None" for no effect (i.e., zero variance).)
| ||||||||
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