Exam 23: Flexible Budgets and Standard Cost Systems

Cedar Designs Company,a custom cabinet manufacturing company,is setting standard costs for one of its products.The main material is cedar wood,sold by the square foot.The current cost of cedar wood is $8.00 per square foot from the supplier.Delivery costs are $0.20 per square foot.Carpenters' wages are $20.00 per hour.Payroll costs are $3.00 per hour,and benefits are $6.00 per hour.How much is the direct labor standard cost per hour?

The following information relates to Bloomberg Manufacturing's overhead costs for the month: Static budget variable overhead \ 14,200 Static budget fixed overhead \ 5,600 Static budget direct labor hours 1,000 hours Static budget number of units 5,000 units Bloomberg allocates manufacturing overhead to production based on standard direct labor hours. Bloomberg reported the following actual results for last month: actual variable overhead,$14,500; actual fixed overhead,$5,400; actual production of 4,700 units at 0.22 direct labor hours per unit.The standard direct labor time is 0.20 direct labor hours per unit. Compute the variable overhead efficiency variance.(round the answer to the nearest dollar)

A direct labor cost variance is unfavorable if the employer pays workers more per hour than budgeted.

Grace Company manufactures candles.The standard direct materials quantity required to produce one large candle is one pound at a cost of $5 per pound.During November,7,200 large candles were produced using 7,500 pounds of direct materials that cost $45,000. Using the format below,prepare an analysis of the direct materials variances.