1. Accounting Presentation 4/29/2014
Tyler Fisher
Accounting Presentation
4/29/2014

2. Please Note: There are no materials inventories.
Problem 16-59
Assume that Timekiller, Inc., manufactures a new electronic game console. The current standard costs sheet for a game console follows.
Direct Materials
? Kilograms
@ $4/kilogram
= ? Per game
Direct Labor
.25 hours
@ ? /hour
Overhead
.25hours
@ ?/hour
TOTAL COSTS
= $ 13.00/game
Assume that the following data appeared in Timekiller’s records at the end of the past month:
Please Note: There are no materials inventories.
Actual production
24,000 units
Actual Sales
15,000 units
Materials (37,500 kgs)
$157,500
Materials Price Variance
7,500 U
Materials Efficiency Variance
6,000 U
Direct Labor Price Variance
4,560 U
Direct Labor (5,700 hours)
95,760
Underapplied overhead (Total)
3,000 U

3. Required:
A) Prepare a variance analysis for direct materials and direct labor and complete the standard cost sheet.
B) Assume that all production overhead is fixed and that the $3,000 underapplied is the only overhead variance that can be computed. What are the actual and applied overhead amounts? (CPA adopted)

4. Setting up our chart A) Actual inputs Flexible Actual at Standard
Price
Flexible
Production
Budget
Actual
Costs
Price
Variance
Efficiency
Variance
(Actual Price X Actual Quantity)
(= 157,500)
(Standard Price X Actual Quantity)
($4 X 37,500 = 150,000)
(Standard Price X Standard Quantity)
($4 X )