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Chowhound Corporation prepares freeze dried meals for hikers

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1. Chowhound Corporation prepares freeze dried meals for hikers. Chowhound has a very wide variety of products. Its best seller is a meal of bear meat, baked beans, and collard greens. Last week, the company prepared 4,800 of these meals using 1,400 direct labor-hours.Chowhound paid these direct labor workers a total of $18,200 for this work, or $13.00 per hour.
   According to the standard cost card for this particular meal, it should require 0.30 direct labor-hours at a cost of $12.50 per hour.
   
   Required:
   1. According to the standards, what direct labor cost should have been incurred to prepare 4,800 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.)
2. Chowhound Corporation prepares freeze dried meals for hikers. Chowhound has a very wide variety of products. Its best seller is a meal of bear meat, baked beans, and collard greens. Last week, the company prepared 4,800 of these meals using 1,400 direct labor-hours.Chowhound paid these direct labor workers a total of $18,200 for this work, or $13.00 per hour.
   According to the standard cost card for this particular meal, it should require 0.30 direct labor-hours at a cost of $12.50 per hour.
   
   2. Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
3. Dynamic Solutions provides supply chain services such as warehousing, order picking and shipping services for Ebay merchants. As part of this service, the company maintains warehouses that stock items sold by its clients. When a client merchant receives an order from a customer, Dynamic Solutions receives a real time copy of that order. Using the order information, Dynamic pulls the item from storage, packs it, and ships it to the customer. Dynamic Solutions uses a predetermined variable overhead rate based on direct labor-hours.
   
   In the most recent month, 195,000 items were shipped to customers using 8,600 direct labor-hours. The company incurred a total of $30,530 in variable overhead costs.
   
   According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.60 per direct labor-hour.
   
   Required:
   1. According to the standards, what variable overhead cost should have been incurred to fill the orders for the 195,000 items? How much does this differ from the actual variable overhead cost? (Round labor-hours per item and overhead cost per hour to 2 decimal places.)
4. Dynamic Solutions provides supply chain services such as warehousing, order picking and shipping services for Ebay merchants. As part of this service, the company maintains warehouses that stock items sold by its clients. When a client merchant receives an order from a customer, Dynamic Solutions receives a real time copy of that order. Using the order information, Dynamic pulls the item from storage, packs it, and ships it to the customer. Dynamic Solutions uses a predetermined variable overhead rate based on direct labor-hours.
   
   In the most recent month, 195,000 items were shipped to customers using 8,600 direct labor-hours. The company incurred a total of $30,530 in variable overhead costs.
   
   According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.60 per direct labor-hour.
   
   2. Break down the difference computed in (1) above into a variable overhead rate variance and a variable overhead efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
5. DOWE Chemical Company produces various chemical compounds for industrial use. DOWE's best selling product, Flubber, is prepared using an elaborate secret distilling process. The table below shows the standard costs for one unit of Flubber:
   Standard Quantity Standard Price or Rate Standard Cost
   Direct materials:2.00 ounces $30.00 per ounce $60.00
   Direct labor:0.50 hours $14.00 per hour 7.00
   Variable manufacturing overhead: 0.50 hours $3.40 per hour 1.70
   Total Standard Cost $ 68.70
   
   
   
   During October, the following activity was recorded relative to production of Flubber:
   
   a. Materials purchased, 10,000 ounces at a cost of $287,000.
   b. There was no beginning inventory of materials; however, at the end of the month, 3,000 ounces of material remained in ending inventory.
   c. The company employs 20 lab technicians to work on the production of Flubber. During October, they worked an average of 130 hours at an average rate of $12.00 per hour.
   d. Variable manufacturing overhead is assigned to Flubber on the basis of direct labor-hours. Variable manufacturing overhead costs during October totaled $4,700.
   e. During October, 3,400 good units of Flubber were produced .
   
   1. For direct materials:
   
   a. Compute the price and quantity variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)
6. DOWE Chemical Company produces various chemical compounds for industrial use. DOWE's best selling product, Flubber, is prepared using an elaborate secret distilling process. The table below shows the standard costs for one unit of Flubber:
   Standard Quantity Standard Price or Rate Standard Cost
   Direct materials:2.00 ounces $30.00 per ounce $60.00
   Direct labor:0.50 hours $14.00 per hour 7.00
   Variable manufacturing overhead: 0.50 hours $3.40 per hour 1.70
   Total Standard Cost $ 68.70
   
   
   
   During October, the following activity was recorded relative to production of Flubber:
   
   a. Materials purchased, 10,000 ounces at a cost of $287,000.
   b. There was no beginning inventory of materials; however, at the end of the month, 3,000 ounces of material remained in ending inventory.
   c. The company employs 20 lab technicians to work on the production of Flubber. During October, they worked an average of 130 hours at an average rate of $12.00 per hour.
   d. Variable manufacturing overhead is assigned to Flubber on the basis of direct labor-hours. Variable manufacturing overhead costs during October totaled $4,700.
   e. During October, 3,400 good units of Flubber were produced .
   
   2. For direct labor:
   
   a. Compute the rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)
7. DOWE Chemical Company produces various chemical compounds for industrial use. DOWE's best selling product, Flubber, is prepared using an elaborate secret distilling process. The table below shows the standard costs for one unit of Flubber:
   Standard Quantity Standard Price or Rate Standard Cost
   Direct materials:2.00 ounces $30.00 per ounce $60.00
   Direct labor:0.50 hours $14.00 per hour 7.00
   Variable manufacturing overhead: 0.50 hours $3.40 per hour 1.70
   Total Standard Cost $ 68.70
   
   
   
   During October, the following activity was recorded relative to production of Flubber:
   
   a. Materials purchased, 10,000 ounces at a cost of $287,000.
   b. There was no beginning inventory of materials; however, at the end of the month, 3,000 ounces of material remained in ending inventory.
   c. The company employs 20 lab technicians to work on the production of Flubber. During October, they worked an average of 130 hours at an average rate of $12.00 per hour.
   d. Variable manufacturing overhead is assigned to Flubber on the basis of direct labor-hours. Variable manufacturing overhead costs during October totaled $4,700.
   e. During October, 3,400 good units of Flubber were produced .
   
   
   3. Compute the variable overhead rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)
8. A flexible budget is a budget that:
9. If the actual level of activity is 4% less than planned, then the variable costs in the static budget should be decreased by 4% before comparing them to actual costs.
10. Of the following sets of comparisons, which one would best identify the impact that changes in the prices of inputs and outputs have on performance?