Question : 168.Palm Time, Inc. budgeted 6,000 step stools for June under : 1302887

168.Palm Time, Inc. budgeted 6,000 step stools for June under its standard costing system. Each stool is sold for $22. Actual production for June was 6,300 stools. The company uses units of product as the cost driver for overhead. Standards and actual costs follow for June:

Budgeted and StandardActual

Direct materials1.1 linear feet @ $2.40 a foot6,400 feet purchased for $15,040; 6,450 feet used

Direct labor0.10 hours @ $14.00 per hour620 hours @$14.30 per hour

Variable overhead$16,800 total$18,400

Fixed overhead$15.00 per stool$9,200

Show the calculation of the standard cost of one step stool.

169.Germ Free produces hand sanitizer. It uses units as the cost driver for overhead and employs a standard costing system. The following information was provided by the company’s controller:

Actual DataStandard and Budgeted Data

Produced14,400 unitsBudgeted units14,200 units

Materials purchased4,600 lbs. for a total of $32,660Budgeted materials0.35 lb. @ $7.00 per lb.

Materials used4,560 lbs.Budgeted labor0.5 hours @ $12.10 per hour

Labor worked7,520 hrs. costing $91,368Budgeted variable overhead$39,050

Actual overheadFixed $51,800; Variable $38,100Budgeted fixed overhead$51,120

a.Calculate the material price and quantity variances and indicate if each is favorable or unfavorable.

b.Calculate the labor rate and efficiency variances and indicate if each is favorable or unfavorable.

170.Germ Free produces hand sanitizer. It uses units as the cost driver for overhead and employs a standard costing system. The following information was provided by the company’s controller:

Actual DataStandard and Budgeted Data

Produced14,400 unitsBudgeted units14,200 units

Materials purchased4,600 lbs. for a total of $32,660Budgeted materials0.35 lb. @ $7.00 per lb.

Materials used4,560 lbs.Budgeted labor0.5 hours @ $12.10 per hour

Labor worked7,520 hrs. costing $91,368Budgeted variable overhead$39,050

Actual overhead$89,900Budgeted fixed overhead$51,120

Calculate the controllable overhead variance and the overhead volume variances and indicate if each is favorable or unfavorable.

171.At the start of the year, ChillerIce estimated that the company would produce 480 portable ice makers during the year (40 per month). Annual fixed overhead costs were estimated to be $600,000 ($50,000 per month), and estimated variable overhead costs were estimated to be $500 per unit. Standard cost per unit was set at $3,450:

Standard material cost               $1,200

Standard labor cost               500

Standard overhead rate per unit               1,750

Total               $3,450

During the year, the company experienced stiff competition and ended up producing and selling only 400 ice makers. Budgeted annual total production costs were $1,656,000, and actual production costs were $1,616,400. The standard cost variances were as follows:

Material price variance              $ 2,200 unfavorable

Material quantity variance              11,500 unfavorable

Labor rate variance              (2,300) favorable

Labor efficiency variance              4,800 unfavorable

Controllable overhead variance              2,000 unfavorable

Overhead volume variance                100,000 unfavorable

Total              $118,200 unfavorable

Suppose you are the CFO of ChillerIce and you have decided to investigate variances which exceed a threshold of 1/2 percent of the total budgeted production cost. Which variance(s) will you investigate? Explain the basis for your answer.

172.The standard labor cost in the production of a pair of Crocs is 0.40 hours at $15 per hour. During the month of June, 13,000 pairs were produced. Actual labor costs were $76,735 for 5,150 hours. Compute the labor rate and labor efficiency variances for the month of June.