P12-53B accounting system. In May 2016, it produced 11,200 suits. The following standard and actual...
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P12-53B accounting system. In May 2016, it produced 11,200 suits. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labour hours. All materials purchased were used Sasha Clothiers is a small company that manufactures oversize suits. The company uses a standard cost (SO 2, 3) Calculate variances and identify significant variances. Cost Element Direct materials Direct labour Overhead Standard (per unit) 8 m at $4.40 per metre 1.2 hours at $13.40 per hour 1.2 hours at $6.10 per hour$49,000 fixed overhead Actual $375,575 for 90,500 m ($4.15 per metre) $200,220 for 14,200 hours ($14.10 per hour) (fixed $3.50; variable $2.60) $37,000 variable overhead Overhead is applied based on direct labour hours. At normal capacity, the budgeted fixed overhead costs are $49,000, and the budgeted variable overhead is $36,400
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