2024 – There is only one problem this week on manufacturing variance Apollo Sports manufacturers
ACCT HW#7 – 2024
| There is only one problem this week on manufacturing variance. | ||||||||
| Apollo Sports manufacturers fabric tents. The poles are purchased from a vendor, so the only part manufactured is the actual fabric tent. | ||||||||
| The company uses a standard cost system based on manufacturing 5,000 tents per month. Overhead is applied on a per-unit basis. In May, | ||||||||
| 4,840 tents were produced. Management has a policy that all variances greater than 3% from standard should be investigated. Standard and | ||||||||
| actual costs are listed below: | ||||||||
| Standard | ||||||||
| Direct material | 18 yards at $3.20 per yard | |||||||
| Direct labor | 6.5 hours at $16.00 per hour | |||||||
| Overhead applied | $12.00 per tent | |||||||
| Actual | ||||||||
| Direct material | 86,550 yards at $3.25 per yard | |||||||
| Direct labor | 32,100 hours at $15.80 per hour | |||||||
| Actual overhead | $56,750 | |||||||
| INSTRUCTIONS: | ||||||||
| 1. Compute the total, price, and quantity variances for both materials and labor. | ||||||||
| State if each variance is favorable or unfavorable. | ||||||||
| 2. Compute the total, volume, and budget overhead variances. State if favorable | ||||||||
| or unfavorable. | ||||||||
| 3. Prepare journal entries for the application of overhead, the actual overhead, | ||||||||
| and to record variances and close the overhead account. Note that on the actual | ||||||||
| overhead you will not have individual expense account amount, so just list | ||||||||
| “various” for the expense accounts. | ||||||||
| 4. Always label all of your work. | ||||||||
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