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Anna [14]
3 years ago
6

Before Sarah makes any changes based on the Budget Performance Report for September, she wants to be sure she understands the re

sults, and has the following questions for you. Answer the following questions (1) and (2). All questions pertain to the September data. 1. What caused the total cost variance for direct materials

Business
1 answer:
KonstantinChe [14]3 years ago
5 0

Complete Question:

Sarah has learned a lot from you over the past two months, and has compiled the following data for Sole Purpose Shoe Company for September using the techniques you taught her. She would like your help in preparing a Budget Performance Report for September. The company produced 3,000 pairs of shoes that required 10,500 units of material purchased at $8.20 per unit and 8,100 hours of labor at an hourly rate of $8.90 per hour during the month. Actual factory overhead during September was $25,200. When entering variances, use a negative number for a favorable cost variance, and a positive number for an unfavorable cost variance.

Use the data in the following table to prepare the Budget Performance Report for Sole Purpose Shoe Company for September.

Manufacturing Costs Standard Price Standard Quantity Standard Cost Per Unit

Direct materials $8.40 per unit 3.6 units per pair $30.24

Direct labor $8.50 per hour 2.8 hours per pair 23.80

Factory overhead $2.80 per hour 2.8 hours per pair 7.84

Total standard cost per pair   $61.88

Sole Purpose Shoe Company

Budget Performance Report

For the Month Ended September 30

1  Manufacturing     Costs  Actual Costs  Standard         Cost at Actual Volume

Cost Variance - (Favorable) Unfavorable

2  Direct materials

3  Direct labor

4  Factory overhead

5  Total manufacturing costs

Before Sarah makes any changes based on the Budget Performance Report for September, she wants to be sure she understands the results, and has the following questions for you.

Answer the following questions (1) and (2). All questions pertain to the September data.

1. What caused the total cost variance for direct materials? Check all that apply.

The actual quantity of direct materials per unit was less than the standard quantity.

A factor other than those listed caused the total cost variance for direct materials.

The actual price for direct materials per unit was less than the standard price.

The favorable price variance dominated the unfavorable quantity variance, causing the total cost variance for direct materials to be favorable.

The unfavorable quantity variance dominated the favorable price variance, causing the total cost variance for direct materials to be unfavorable.

2. What caused the total cost variance for direct labor? Check all that apply.

The actual rate for labor hours per unit was less than the standard rate.

The actual number of labor hours per unit was less than the standard number.

A factor other than those listed caused the total cost variance for direct labor.

The unfavorable rate variance was larger than the favorable time variance, causing the total cost variance for direct labor to be unfavorable.

The favorable time variance was larger than the unfavorable rate variance, causing the total cost variance for direct labor to be favorable.

Answer and explanation:

Sole purpose shoe company                                                                                                      

Budget performance report                                                                                                  

For the month ended September 30                                                                                      

check the attached image for a well formatted table

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