“Kimm Company has gathered the following information about
its product.

Direct materials: Each unit of product contains 4.90 pounds of
materials. The average waste and spoilage per unit produced under normal
conditions is 0.80 pounds. Materials cost $3 per pound, but Kimm
always takes the 4.76% cash discount all of its suppliers offer. Freight
costs average $0.30 per pound.

Direct labor. Each unit requires 1.90 hours of labor. Setup,
cleanup, and downtime average 0.28 hours per unit. The average hourly
pay rate of Kimms employees is $13.60. Payroll taxes and fringe benefits are
an additional $2.90 per hour.

Manufacturing overhead. Overhead is applied at a rate of $7.30 per
direct labor hour.

Compute Kimms total
standard cost per unit.(Round answer to 2 decimal
places, e.g. 1.25.)

Total
standard cost per unit

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Lewis Companys standard
labor cost of producing one unit of Product DD is 3.90 hours at the
rate of $11.00 per hour. During August, 41,900 hours of labor
are incurred at a cost of $11.11 per hour to
produce 10,600 units of Product DD.

(a)Compute the total labor
variance.

Total labor variance

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(b)Compute the labor price and
quantity variances.

Labor price variance

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Labor quantity variance

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.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>

(c)Compute the labor price and
quantity variances, assuming the standard is 4.20 hours of direct
labor at $11.24 per hour.

Labor price variance

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Labor quantity variance

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

Direct
materials2 pound plastic at $7.82 per pound

$ 15.64

Direct
labor1.50 hours at $12.00 per hour

18.00

Variable
manufacturing overhead

9.75

Fixed
manufacturing overhead

11.25

Total
standard cost per unit

$54.64

The predetermined manufacturing overhead rate is $14 per direct labor hour
($21.00 1.50). It was computed from a master manufacturing overhead
budget based on normal production of 8,100 direct labor hours
(5,400 units) for the month. The master budget showed total variable costs
of $52,650 ($6.50 per hour) and total fixed overhead costs of
$60,750 ($7.50 per hour). Actual costs for October in
producing 3,700 units were as follows.

Direct
materials (7,600 pounds)

$ 61,028

Direct
labor (5,450 hours)

67,417

Variable
overhead

54,854

Fixed
overhead

24,806

Total
manufacturing costs

$208,105

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

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.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>

Materials
price variance

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Materials
quantity variance

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Total
labor variance

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Labor
price variance

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Labor
quantity variance

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(b) Compute the total overhead
variance.

Total
overhead variance

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.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>

Kimm Company has gathered the following information about
its product.

Direct materials: Each unit of product contains 4.90 pounds of
materials. The average waste and spoilage per unit produced under normal
conditions is 0.80 pounds. Materials cost $3 per pound, but Kimm
always takes the 4.76% cash discount all of its suppliers offer. Freight
costs average $0.30 per pound.

Direct labor. Each unit requires 1.90 hours of labor. Setup,
cleanup, and downtime average 0.28 hours per unit. The average hourly
pay rate of Kimms employees is $13.60. Payroll taxes and fringe benefits are
an additional $2.90 per hour.

Manufacturing overhead. Overhead is applied at a rate of $7.30 per
direct labor hour.

Compute Kimms total
standard cost per unit.(Round answer to 2 decimal
places, e.g. 1.25.)Total
standard cost per unit$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Lewis Companys standard
labor cost of producing one unit of Product DD is 3.90 hours at the
rate of $11.00 per hour. During August, 41,900 hours of labor
are incurred at a cost of $11.11 per hour to
produce 10,600 units of Product DD.

(a)Compute the total labor
variance.Total labor variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>
(b)Compute the labor price and
quantity variances.Labor price variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Labor quantity variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>
(c)Compute the labor price and
quantity variances, assuming the standard is 4.20 hours of direct
labor at $11.24 per hour.Labor price variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Labor quantity variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Costello Corporation manufactures a single product. The
standard cost per unit of product is shown below.Direct
materials2 pound plastic at $7.82 per pound$ 15.64Direct
labor1.50 hours at $12.00 per hour18.00Variable
manufacturing overhead9.75Fixed
manufacturing overhead11.25Total
standard cost per unit$54.64
The predetermined manufacturing overhead rate is $14 per direct labor hour
($21.00 1.50). It was computed from a master manufacturing overhead
budget based on normal production of 8,100 direct labor hours
(5,400 units) for the month. The master budget showed total variable costs
of $52,650 ($6.50 per hour) and total fixed overhead costs of
$60,750 ($7.50 per hour). Actual costs for October in
producing 3,700 units were as follows.Direct
materials (7,600 pounds)$ 61,028Direct
labor (5,450 hours)67,417Variable
overhead54,854Fixed
overhead24,806 Total
manufacturing costs$208,105
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$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Materials
price variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Materials
quantity variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Total
labor variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Labor
price variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>Labor
quantity variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>
(b) Compute the total overhead
variance.Total
overhead variance$.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>.0/msohtmlclip1/01/clip_image001.gif”” alt=””http://edugen.wiley.com/edugen/art2/common/pixel.gif””>”