You have been given the following information about the production of Bramble Co., and are asked to provide the factory manager with information for a meeting with the vice-president of operations: Standard Cost Card Direct materials (5.60 kg at $3.40 per kilogram) $19.04 Direct labour (0.70 hours at $4.10) 2.87 Variable overhead (0.70 hours at $3.40 per hour) 2.38 Fixed overhead (0.70 hours at $6.00 per hour) 4.20 $28.49 The following is a production report for the most recent period of operations: Variances Costs Total Standard Cost Price/ Rate Spending/ Budget Quantity/ Efficiency Volume Direct materials $420,784 $6,335 F $9,996 U Direct labour 63,427 4,215 U 5,699 U Variable overhead 52,598 $1,040 F ? Fixed overhead 92,820 470 F $12,000 U How many actual direct labour hours were worked during the period? Actual direct labour hours enter the actual direct labour hours hours What was the actual rate paid per direct labour hour? (Round answer to 2 decimal places, e.g. 15.25.) Actual rate $enter the actual rate per hour in dollars rounded to 2 decimal places /hr What was the actual variable overhead cost incurred during the period? Actual variable overhead $enter the actual variable overhead in dollars

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....

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You have been given the following information about the production of Bramble Co., and are asked to provide the factory manager with information for a meeting with the vice-president of operations:

		Standard Cost Card
Direct materials (5.60 kg at $3.40 per kilogram)		$19.04
Direct labour (0.70 hours at $4.10)		2.87
Variable overhead (0.70 hours at $3.40 per hour)		2.38
Fixed overhead (0.70 hours at $6.00 per hour)		4.20
		$28.49

The following is a production report for the most recent period of operations:

		Variances
Costs	Total Standard Cost	Price/ Rate		Spending/ Budget		Quantity/ Efficiency	Volume
Direct materials	$420,784	$6,335	F				$9,996	U
Direct labour	63,427	4,215	U				5,699	U
Variable overhead	52,598				$1,040	F	?
Fixed overhead	92,820				470	F			$12,000	U

How many actual direct labour hours were worked during the period?

Actual direct labour hours

enter the actual direct labour hours

hours

What was the actual rate paid per direct labour hour? (Round answer to 2 decimal places, e.g. 15.25.)

Actual rate

$enter the actual rate per hour in dollars rounded to 2 decimal places /hr

What was the actual variable overhead cost incurred during the period?

Actual variable overhead

$enter the actual variable overhead in dollars

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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