ACCT346 Standard Costs and Variance Analysis

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ACCT346 Standard Costs and Variance Analysis
Why do we try to get a standard cost for items going into …

SKU: ACCT 346 Standard Costs and Variance Analysis Discussions Week 6 Categories: , Tags: , , ,

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ACCT346 Standard Costs and Variance Analysis

ACCT346 Standard Costs and Variance Analysis

Discussions Week 6 All Students Post 44 Pages

What role do standard costs play in controlling the operations of a business? How are standard costs developed for direct materials, direct labor, and manufacturing overhead? Are there ever costs that we can’t develop standards for related to manufacturing the goods?

Why do we try to get a standard cost for items going into the products we manufacture? What role do standard costs play in controlling the operations of a business? How are standard costs developed for direct materials, direct labor, and manufacturing overhead? Are there ever costs that we can’t develop standards for related to manufacturing the goods? What do we see when we analyze the variances?…

PROBLEM #1 FOR EVERYONE
Talya Company produces Basketballs. The standard cost for each Basketball is:
Direct material, 4 ft @ $6.00/ft = $24.00
Direct labor, 4 hours at $15.00/hr = $60.00
During December 4,000 basketballs were produced. 19,600 ft of leather were purchased at $5.85/ft and 18,600 ft were used in production. Direct labor costs incurred were $270,000 for 20,000 hours.
a)What is the direct material price variance
b) What is the material usage variance?
c) What is the Labor rate variance?
d) What is the labor efficiency variance?
Be sure to indicate if FAVORABLE or UNFAVORABLE. That is crucial…