1. A review of accounting records for last year disclosed the following selected information
Variable costs:
Direct materials used 36,000
Direct labor 6,000
Manufacturing overhead 40,000
Selling costs 32,000
Fixed costs:
Manufacturing overhead 310,000
Selling costs 115,000
Administrative costs 65,000
In addition, the company suffered a $13,600 uninsured factory fire loss during the year. What were the product costs and period costs for last year using absorption costing?
2. A corporation manufactures a specialty line of dresses using a job-order costing system. During January, the following costs were incurred in completing job J-1:
Direct labor 26,500
Direct materials 9,938
Administrative costs 2,725
Selling costs 7,453
Factory overhead was applied at the rate of $27 per direct labor hour, and job J-1 required 331 direct labor hours. If job J-1 resulted in 2,208 good dresses, the cost of goods sold per unit is:
3. A cost accountant is developing departmental factory overhead application rates for the company’s tooling and fabricating departments. The budgeted overhead for each department and the data for one job are shown below.
Department: Tooling Fabricating
Supplies 1,073 275
Supervisor’s salaries 1,925 1,980
Indirect labor 1,485 5,720
Depreciation 880 6,820
Repairs 4,362 3,795
Total budgeted overhead 9,725 18,590
Total direct labor hours 468 666
Direct labor hours on Job #231 12 6
Using the departmental overhead application rates, total overhead applied to Job #231 in the Tooling and Fabricating Departments will be
5. The static budget for the month of May was for 9,500 units with direct materials at $17 per unit. Direct labor was budgeted at 35 minutes per unit for a total of $133,000. Actual output for the month was 8,700 units with $147,900 in direct materials and $139,200 in direct labor expense. The direct labor standard of 35 minutes was maintained throughout the month.
Determine whether a favorable or unfavorable variance occurred and what caused it.
Answer:
Favorable/Unfavorable
Amount
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