Solution-Classify the variations between favorable and

Classify the variations between favorable and unfavorable

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Reference no: EM132573706

The company "Carpinteros Inc." produces oversized library shelves. The budget contains the following information:

Estimated production for the period - 12 units.

STANDARD COST CARD FOR LIBRARY RACKS

Cost Element Estimated Quantity for Each Unit Produced Price by unit Cost per unit produced

Direct materials 8 pieces $ 10.00 $ 80.00

Direct Labor 40 hours $ 6.00 $ 240.00

Indirect manufacturing costs 40 $ 0.75 $ 30.00

Total Standard Cost per unit $ 350.00

Operations of the month:

Purchase of 148 pieces of direct materials for $ 11.00 each piece for a total of $ 1,628.00

Materials Used - 140 pieces

Labor employed in manufacturing - 714 at $ 6.50 per hour for a total of $ 4,641.00

Indirect Manufacturing Cost - $ 406.00

Production: 14 units finished

Instructions

Carefully read the following above.

Question 1: Prepare variance analysis between standard costs and actual costs.

Question 2: Classify the variations between favorable and unfavorable.

Question 3: Mention the reasons for the variations.

Question 4: Mention the impact that the variations found could have on the operation of the company.

Reference no: EM132573706

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Classify the variations between favorable and unfavorable

Reference no: EM132573706

Reference no: EM132573706

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