176.Hatter, Inc. allocates fixed overhead at a rate of $17 per direct labor hour. This amount is based on 90% of capacity or 3,600 direct labor hours for 6,000 units. During July, Hatter produced 5,500 units. Budgeted fixed overhead is $66,000, and overhead incurred was $67,000.
Required:
Determine the volume variance for July.
177.Gleason Company has developed the following standard cost data based on 60,000 direct labor hours, which is 75% of capacity. Fixed overhead is $360,000 and variable overhead is $180,000 at this level of activity.
Per Unit
Direct material (3 lbs. @ $2.00/lb.)$6.00
Direct labor (0.5 hrs. @ $8.00/hr.)4.00
Variable overhead (0.5 hrs. @ $3.00/hr.)1.50
Fixed overhead (0.5 hrs. @ $6.00/hr.)3.00
Total standard cost$14.50
During the current period, the company operated at 80% of capacity and produced 128,000 units. Actual costs were:
Direct material (380,000 lbs.)$779,000
Direct labor (63,000 hrs.)507,150
Fixed overhead365,000
Variable overhead220,000
Calculate the variable overhead spending and efficiency variance and the fixed overhead spending and volume variances. Indicate whether each is favorable or unfavorable.
178.Naches Co. assigned direct labor cost to its products in May for 1,300 standard hours of direct labor at the standard $8 per hour rate. The direct labor rate variance for the month was $200 favorable and the direct labor efficiency variance was $150 favorable. Prepare the journal entry to charge Work in Process Inventory for the standard labor cost of the goods manufactured in May and to record the direct labor variances. Assuming that the direct labor variances are immaterial, prepare the journal entry that Naches would make to close the variance accounts.
179.Firenze Company's fixed budget for the first quarter of the calendar year appears below. Prepare flexible budgets that show variable costs per unit, fixed costs and two different flexible budgets for sales volumes of 22,000 and 24,000.
Sales (20,000 units)$800,000
Cost of goods sold:
Direct materials$160,000
Direct labor150,000
Variable overhead100,000
Fixed overhead120,000530,000
Gross profit$270,000
Selling expenses:
Sales commissions(all variable)40,000
Advertising (all fixed)50,000
General and administrative expenses:
Salaries (all fixed)80,000
Rent (all fixed)30,000
Depreciation (all fixed)20,000220,000
Net income from operations$50,000
180.Gala Enterprises reports the following information regarding the production of one of its products for the month. Compute the direct materials cost variance, the direct materials price variance, the direct materials quantity variance and identify each as either favorable or unfavorable.
Direct materials standard (6 lbs. @ $3/lb.)$18 per finished unit
Actual direct materials used179,000 lbs.
Actual finished units produced30,000 units
Actual cost of direct materials used$554,900