Quality Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 142,000 square feet of extruded vinyl purchased at $1.10 per square foot. Production required 430 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1 15 per square foot. The labor standard was 0.025 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each varianc is favorable (F or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials cost variance Direct labor cost variance %3D Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Quality Fender's managers have been making trade-offs? Explain.

Quality Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 142,000 square feet of extruded vinyl purchased at $1.10 per square foot. Production required 430 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1 15 per square foot. The labor standard was 0.025 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each varianc is favorable (F or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials cost variance Direct labor cost variance %3D Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Quality Fender's managers have been making trade-offs? Explain.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 2PB: Five Card Draw manufactures and sells 10,000 units of Aces, which retails for $200, and 8,000 units...

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Five Card Draw manufactures and sells 10,000 units of Aces, which retails for $200, and 8,000 units of Kings, which retails for $170. The direct materials cost is $20 per unit of Aces and $15 per unit of Kings. The labor rate is $30 per hour, and Five Card Draw estimated 64000 direct labor hours. It takes 4 direct labor hours to manufacture Aces and 3 hours for Kings. The total estimated overhead is $128,000. Five Card Draw uses the traditional allocation method based on direct labor hours. A. How much is the gross profit per unit for Aces and Kings? B. What is the total gross profit for the year?
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Premium Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 142,000 square feet of extruded vinyl K purchased at $1.35 per square foot. Production required 470 direct labor hours that cost $13.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.40 per square foot. The labor standard was 0.027 direct labor hour per fender, at a standard cost of $12.50 per hour. Read the requiremen Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Direct materials cost variance Direct labor cost variance Formula Variance
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