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The roofing company manufactures shingles. Standard Cost Sheet per shingle 1.5 pounds $0.07 per pound direct labor Direct materials Asphalt 0.01 hour $11 per hour Direct labor Variable direct la...


The roofing company manufactures shingles. Standard Cost Sheet per shingle 1.5 pounds $0.07 per pound direct labor Direct mat
Required: Make sure you do not forget to label each variance U or F. You need to use cell references for your calculations 1.
The roofing company manufactures shingles. Standard Cost Sheet per shingle 1.5 pounds $0.07 per pound direct labor Direct materials Asphalt 0.01 hour $11 per hour Direct labor Variable direct labor Manufacturing $2 per hour 0.01 hour overhead Fixed direct labor Manufacturing 0.01 hour $10 per hour overhead Total standard cost per shingle $60,000 600,000 Units 6000 direct labor hours Budgeted fixed manufacturing overhead for the period is Budgeted units to be produced Standard fixed manufacturing overhead based on expected capacity of The following information is available regarding the company's actual operations for the period. 530,000 Shingles produced Materials purchased: Asphalt 9 $0.09 per pound 755,000 pounds 0 Materials used: 750,000 pounds 5,100 hours Asphalt Direct labor: $13.00 per hour Manufacturing overhead incurred Variable $11,322 26 $2.22 VOH rate per direct labor hour $59,700 Fixed 28
Required: Make sure you do not forget to label each variance U or F. You need to use cell references for your calculations 1. Calculate the direct materials price and quantity variance. Material price variance should be based on material purchased, since you want to isolate the variance as soon as possible. Material Quantity variance should be based on materials used, since this is monitoring the production efficiency Material purchase price variance Material Quantity variance 1 2. Calculate the direct labor rate and efficiency variances Labor rate variance Labor Efficiency variance 3. Variable manufacturing overhead spending and efficiency variances Variable overhead spending variance Variable overhead efficiency variance 4. Fixed manufacturing overhead budget variance. Fixed Manufacturing overhead budget variance 5. Pick out the two variances that you computed above that you think should be further investigated. Explain why you picked these 2 variances and what might be the possible cause of the variances.
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Summary of Answer
Material (Answer 1)
Material price variance         15,100 Unfavorable
Material quantity variance           3,150 Favorable
Labor (Answer 2)
Labor rate variance         10,200 Unfavorable
Labor efficiency variance           2,200 Favorable
Variable Overhead (Answer 3)
Variable overhead spending variance           1,122 Unfavorable
Variable overhead efficiency variance               400 Favorable
Fixed overhead (Answer 4)
Fixed Overhead Budget Variance               300 Favorable
Minus sign indicate Favorable variance.
Measure Pound
Standard price per Pound $            0.07
Actual price per Pound $            0.09
530000*1.5 Standard quantity in Pounds 795000
Actual quantity purchased in Pounds 755000
Actual quantity used in Pounds 750000
Actual price per Pound 0.09
Less Standard price per Pound -0.07
Difference 0.02
Multiply Actual quantity purchased in Pounds 755000
Material price variance $        15,100
Indicate Unfavorable
Actual quantity used in Pounds 750000
Less Standard quantity in Pounds -795000
Difference -45000
Multiply Standard price per Pound 0.07
Material quantity variance $        (3,150)
Indicate Favorable
Minus sign indicate Favorable variance.
Measure Hour
Standard rate per Hour $            11.00
Actual rate per Hour $            13.00
530000*0.01 Standard labor Hours 5300
Actual labor Hours 5100
Actual rate per Hour 13.00
Less Standard rate per Hour -11.00
Difference 2.00
Multiply Actual labor Hours 5100
Labor rate variance $          10,200
Indicate Unfavorable
Actual labor Hours 5100
Less Standard labor Hours -5300
Difference -200
Multiply Standard rate per Hour 11.00
Labor efficiency variance $          (2,200)
Indicate Favorable
Minus sign indicate Favorable variance.
Measure Hour
Standard variable overhead rate per Hour $                2.00
Actual variable overhead rate per Hour $                2.22
530000*0.01 Standard Hours 5300
Actual Hours 5100
Actual variable overhead rate per Hour 2.22
Less Standard variable overhead rate per Hour -2.00
Difference 0.22
Multiply Actual Hours 5100
Variable overhead spending variance $              1,122
Indicate Unfavorable
Actual Hours 5100
Less Standard Hours -5300
Difference -200
Multiply Standard variable overhead rate per Hour 2.00
Variable overhead efficiency variance $               (400)
Indicate Favorable
Minus sign indicate Favorable variance.
Budgeted Fixed Overheads $                60,000
Actual Fixed Overheads $                59,700
Budgeted units                  600,000
Actual units                  530,000
Overhead rate =( Budgeted Fixed Overheads / Budgeted units)
Applied Fixed Overhead = (Budgeted Fixed Overhead Rate * Actual units)
Budgeted Fixed Overhead Rate (60000/600000) $                     0.10
Budgeted Fixed Overheads 60000
Less: Applied Fixed Overhead (0.1*530000) -53000
Fixed Overhead Volume Variance $                  7,000
Indicate Unfavorable
Actual Fixed Overheads 59700
Less: Budgeted Fixed Overheads -60000
Fixed Overhead Budget Variance $                    (300)
Indicate Favorable
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