Question

Bramble, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows.

Bramble, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Direct materials Direct labor Variable overhead Fixed overhead Standard Price Standard Quantity Standard Cost $4 per yard 1.50 yards $6.00 $12 per DLH 0.50 DLH 6.00 $4 per DLH 0.50 DLH 2.00 $6 per DLH 0.50 DLH 3.00 $17.00 Sandy Robison, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November. The company purchased and used 79,600 yards of fabric during the month. Fabric purchases during the month were made at $3.90 per yard. The direct labor payroll ran $314,825, with an actual hourly rate of $12.25 per direct labor hour. The annual budgets were based on the production of 52,000 shirts, using 247,000 direct labor hours. Though the budget for November was based on 49,100 shirts, the company actually produced 51,100 shirts during the month. Indirect material Indirect labor Equipment repair Equipment power Variable Overhead Budget Annual Budget Per Shirt November-Actual $449,000 $0.90 $49,000 300,000 0.60 31,000 198,000 0.40 20,700 50,000 0.10 6,600 $997,000 $2.00 $107,300 Total

Answer 1

Answer Page No 0 @ Diyet materiale price verance Dised material price variance = Actual quantity (Aa)) Aclüalwate (AR) - standard rate (BR) = 79600 x( 319 -- 4) = 49600 X (-0.1) = 7960 F Favorable 1: Direct material price variance = $ 7960 Direct material quantidin vanliance = Diset material quantili variance - Standard rate (SP) celial quantity - Standard quanti, csa) =#4 { 49600 — (51,100X15]] :.= 4(79600 – 96650) = 4(2950) = 11800 U 1... Direct material quantity variance = $1800 unfavorable

Page: No ④ Actual hours (AH) a $314,825 $12:25 = 25700 DLH Receta labor creatie walcance Direct labor vrate variance = AH [AR - SR] = 25400{ 1205 – $10] = 25400 x (0.25) = 64250 :: Direct laboo vrate variance = $6425 unfavorable Digest labors ebbiciency variance Direct tobor efficiency variance = SRX (AH - SH] =$12 x( 95400 – SH - standart .. (49100xog hours 512 X (25400 – 24550) • 138000 variance = $ 13800 evitadorable li. Direct labore etticiency

Page No ® Variable overhead arending ucaulance Variable overhead spending variance e retical variable overhead - CAH X SR) = 107,300 – (25400 Det'X $4 per DLH) =101300 - 102800 = 45000 1. Variable overhead Spending variance = $4500 unfavorable Variable verhead elbiciency wariance Variable overhead efficiency variance - SRX ( AM - SH) = $4x(25400 –(49100x Dig) -4X (25400 - 24550) = 4x 1150 = $ 46000 12. Variable overhecid efficiency variance = $4600 unfavorable a fim de eventos de este ding volante Budgeted monthly ffaed overhead =- 1494000 104500

Page: No 4 fixed overhead Spencing wariance - Actual overhead - Budgeted overhead $ 126300 - 124500 e$ 18000 fined overhead spending variance = $1800 untavorable