ACC 117 Lecture Notes - Lecture 10: Finished Good, European Cooperation In Science And Technology, Management Accounting

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redminnow421

25 Nov 2020

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Manufacturing costs: direct materials, direct labor, & manufacturing overhead. Direct materials include the major material inputs that can be directly and conveniently traced to each unit of product (the cost object). Miscellaneous ingredients and materials that are not worth tracing to each individual product would be considered indirect materials and included in manufacturing overhead. Direct labor refers to the hands on labor that can be directly and conveniently traced to the product. It does not include employees who rarely touch the product as it is being produced, such as supervisors, maintenance workers, and factory engineers. These are considered indirect labor and are included in manufacturing overhead. Manufacturing overhead includes all manufacturing costs other than direct materials and direct labor incurred to produce a physical product. It includes all of the costs associated with making the product that cannot be traced to a specific unit, such as indirect materials, indirect labor, factory rent, factory insurance, and factory utilities.

Related Questions

Kubin Companyâs relevant range of production is 21,000 to 25,000 units. When it produces and sells 23,000 units, its average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$	8.10
Direct labor	$	5.10
Variable manufacturing overhead	$	2.60
Fixed manufacturing overhead	$	6.10
Fixed selling expense	$	4.60
Fixed administrative expense	$	3.60
Sales commissions	$	2.10
Variable administrative expense	$	1.60

2. Assume the cost object is the Manufacturing Department and that its total output is 23,000 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department?

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?


2a.	Direct materials per unit
	Direct labor per unit
	Variable manufacturing overhead per unit
	Fixed manufacturing overhead per unit
	Total manufacturing cost per unit	$0.00
	Number of units sold
	Total direct costs	$0

2b.	Total indirect costs

beigemallard451

Problem 25-1A Partially correct answer. Your answer is partially correct. Try again. Costello Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materialsâ3 pound plastic at $6.83 per pound $ 20.49 Direct laborâ1.50 hours at $12.00 per hour 18.00 Variable manufacturing overhead 9.00 Fixed manufacturing overhead 9.00 Total standard cost per unit $56.49 The predetermined manufacturing overhead rate is $12 per direct labor hour ($18.00 Ã· 1.50). It was computed from a master manufacturing overhead budget based on normal production of 8,250 direct labor hours (5,500 units) for the month. The master budget showed total variable costs of $49,500 ($6.00 per hour) and total fixed overhead costs of $49,500 ($6.00 per hour). Actual costs for October in producing 3,400 units were as follows. Direct materials (10,310 pounds) $ 71,551 Direct labor (4,950 hours) 60,489 Variable overhead 43,144 Fixed overhead 19,916 Total manufacturing costs $195,100 The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. (a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

Total materials variance

Materials price variance

Materials quantity variance

Total labor variance

Labor price variance

Labor quantity variance

(b) Compute the total overhead variance.

Total overhead variance

coralwolf381

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materialsâ1 pound plastic at $6 per pound		$ 6.00
Direct laborâ2.00 hours at $11.15 per hour		22.30
Variable manufacturing overhead		14.00
Fixed manufacturing overhead		18.00
Total standard cost per unit		$60.30

The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 Ã· 2.00). It was computed from a master manufacturing overhead budget based on normal production of 12,000 direct labor hours (6,000 units) for the month. The master budget showed total variable costs of $84,000 ($7.00 per hour) and total fixed overhead costs of $108,000 ($9.00 per hour). Actual costs for October in producing 4,100 units were as follows.

Direct materials (4,250 pounds)		$ 26,350
Direct labor (8,070 hours)		92,402
Variable overhead		99,710
Fixed overhead		33,590
Total manufacturing costs		$252,052

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

(a)

Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

(b)

Compute the total overhead variance.

skyant786

ACC 117 Lecture Notes - Lecture 10: Finished Good, European Cooperation In Science And Technology, Management Accounting

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