105) The Garson Company manufactures roofing shingles.  The production process involves heating and compressing asphalt into sheets and then rolling coarse sand into the hot asphalt.  The sheets are then cooled, cut into shingles, and packaged.

The following standard costs were developed:




Asphalt2 lbs. x $0.08/lb.$0.16

Sand2 lbs. x $0.02/lb.0.04

Direct labour.01 hrs. x $7.00/hr.0.07

Variable overhead.01 hrs. x $3.00/hr.0.03

Fixed overhead?

Total standard cost per shingle?

The following information is available regarding the company’s operations for the period.

Shingles produced:500,000

Materials purchased:

Asphalt:800,000 pounds @ $0.07 per pound

Sand:900,000 pounds @ $0.03 per pound

Materials used:

Asphalt:775,000 pounds

Sand:850,000 pounds

Direct labour:5,100 hours costing $36,000

Manufacturing overhead incurred:



Budgeted fixed manufacturing overhead for the period is $60,000 and the standard fixed overhead rate is based on expected capacity of 6,000 direct labour hours.

a. Calculate the standard fixed manufacturing overhead rate.

b. Complete the standard cost card for roofing shingles.

c. Calculate the following variances:

Materials price and usage variances

Labour rate and efficiency variances

Variable manufacturing overhead spending and efficiency variances

Fixed manufacturing overhead budget and volume variances

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