# Acc350 Managerial Accounting: P11-19 Flandro Company uses a standard cost system

Acc350 Managerial Accounting

P11-19 Comprehensive Standard Cost Variances (Req 1-3 only)
Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company's budget for the current year:
Denominator activity (direct labor-hours) 5,000

The standard cost card for the company's only product is given below:
Direct materials, 3 yards at \$4.40 per yard 13.20
Direct labor, 1 hour at \$12 per hour 12.00
Manufacturing overhead, 140% of direct labor cost 16.80
Standard cost per unit 42.00

During the year, the company produced 6,000 units of product and incurred the following costs:
Materials purchased, 24,000 yards at \$4.80 per yard 115,200
Materials used in production (in yards) 18,500
Direct labor cost incurred, 5,800 hours at \$13 per hour 75,400
Variable manufacturing overhead cost incurred 29,580
Fixed manufacturing overhead cost incurred 60,400

Required:
1. Redo the standard cost card in a clearer, more usable format by detailing the variable and fixed overhead cost elements. (Round your answers to 2 decimal places. Omit the "\$" sign in your response.)
2. Prepare an analysis of the variances for direct materials and direct labor for the year. (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). Omit the "\$" sign in your response.)
3. Prepare an analysis of the variances for variable and fixed overhead for the year. (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). Omit the "\$" sign in your response.)
4. What effect, if any, does the choice of a denominator activity level have on unit standard costs? Is the volume variance a controllable variance from a spending point of view? Explain.