Purchase Solution

# Finance- The Litton Company

Not what you're looking for?

The Litton Company has established Standards as follows:

Direct Material: 3 pounds per unit @ \$4 per pound = \$12 per unit
Direct Labor: 2 hours per unit at \$8 per hour = \$16 per unit
Variable Manufacturing Overhead: 2 hours per unit @\$5 per hour = \$10 per unit

Units Produced = 600 units
Direct Material Used = 2000 pounds
Direct Material Purchased (3,000 pounds) = \$11,400
Direct Labor Cost (1,100 hours) = \$9240
Variable manufacturing overhead cost incurred = \$5720

The company applies variable manufacturing overhead to products on the basis of standard direct labor hours

From the foregoing information, compute the following variances. Show weather the variance is favorable or unfavorable.

Materials Price Variance = ? Materials quantity variance = ?

Direct Labor Variance = ? Direct Labor effeciency Variance = ?

Variable overhead rate variance = ? Variable overhead effeciency variance = ?

##### Solution Summary

The expert examines The Litton Company finance problems.

##### Solution Preview

The Litton Company has established Standards as follows:

Direct Material: 3 pounds per unit @ \$4 per pound = \$12 per unit
Direct Labor: 2 hours per unit at \$8 per hour = \$16 per unit
Variable Manufacturing Overhead: 2 hours per unit @\$5 per hour = \$10 per unit

Units Produced = 600 units
Direct Material Used = 2000 pounds
Direct Material Purchased (3,000 pounds) = \$11,400
Direct Labor Cost (1,100 hours) = \$9240
Variable manufacturing overhead cost incurred = \$5720

The company applies variable manufacturing overhead to products on the basis of standard direct labor hours

From the foregoing ...

Solution provided by:
###### Education
• BA, Ain Shams University, Cairo Egypt
• MBA, California State University, Sacramento
###### Recent Feedback
• "ty i have more need help with"
• "ty i have jmore i need help with"
• "great help"
• "excellent help"
• "Very helpful and easy to understand."

##### Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

##### Introduction to Finance

This quiz test introductory finance topics.

##### Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

##### Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

##### Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations