Question 2 of 6 Save Exit Submit ater Company manufactures

Question 2 (of 6) Save & Exit Submit ater Company manufactures two products, Mountain Mist and Valley Stream. The company prepares its master budget on the basis of standard he following data are for March: tream Mountain Mist ards ect materials ect labor able overhead (per direct labor-hour) ed overhead (per month) ected activity (direct labor-hours) l results ect material (purchased and used) ect labor iable overhead ed overhead its produced (actual) 3 ounces at $14.80 per ounce 5 hours at $60.20 per hour $48 4 ounces at $16.70 per ounce 6 hours at $77 per hour $52.70 $399,360 7,800 $348,075 5,950 3,300 ounces at $13.70 per ounce 4,920 hours at $61.25 per hour $248,550 $315,950 1,020 units 4,600 ounces at $17.75 per ounce 7,420 hours at $78.50 per hour $380,510 $398,000 1,220 units ed: 8:05 PM 6/13/2018 earch

Solution

Mountain Mist :

a. Direct Material :

Actual            Price              Actual Inputs          Efficiency               Flexible Budget

Costs             Variance         at Standard            Variance               (Standard Inputs

                                                  Price                                                     Allowed for Goods

                                                                                                                 Output)

(AQ * AP)                                (SP * AQ)                                                  (SP * SQ)

13.70 * 3300                           14.80 * 3300                                           14.80 * 3 * 1020

= 45,210                                  = 48,840                                                    = 45,288

                               3,630                                               3,552

Direct Laour :

61.25 * 4,920                             60.20 * 4,920                                        60.20 * 5 * 1020

= 301,350                                    = 296,184                                                 = 307,020

                                5,166                                                  10,836

Variable Overhead :

                                                       48 * 4,920                                                  48 * 5 * 1020

= 248,550                                     = 236,160                                                   = 244,800                      

                               12,390                                                          8,640

b. Fixed Overhead :

Actual              Price                 Budget                 Production                       Applied

Costs             Variance                                            Volume

                                                                                  Variance

315,950                                     348,075                                                      348,075/5,950

                                                                                                                            *5*1020

                                                                                                                             = 298,350

                          32,125                                                 49,725

Valley Stream :

a. Direct Material :

Actual            Price              Actual Inputs          Efficiency               Flexible Budget

Costs             Variance         at Standard            Variance               (Standard Inputs

                                                  Price                                                     Allowed for Goods

                                                                                                                 Output)

(AQ * AP)                                (SP * AQ)                                                  (SP * SQ)

17.75 * 4600                           16.70 * 4700                                           16.70 * 4 * 1220

= 81,650                                  = 78,490                                                    = 81,496

                               3,160                                               3,006

Direct Laour :

78.50 * 7,420                             75 * 7,420                                        75 * 6 * 1220

= 582,470                                    = 556,500                                                 = 549,000

                                25,970                                                  7,500

Variable Overhead :

                                                       52.7 * 7,420                                             52.7 * 6*1220

= 380,510                                     = 391,034                                                   = 385,764                      

                               10,524                                                          5,270

b. Fixed Overhead :

Actual              Price                 Budget                 Production                       Applied

Costs             Variance                                            Volume

                                                                                  Variance

398,000                                     399,360                                                      399,360/7800

                                                                                                                            *6*1220

                                                                                                                             = 374,784

                          1,360                                                 24,576