# FIN Two problems – Flagstaff, Inc. & Riggins, Inc.

1. Flagstaff, Inc. uses standard costing for its one product, baseball bats. The standards call for 3 board-feet of wood at \$1.40 per board-foot, and 45 minutes of work at \$12 per hour per bat. Total manufacturing overhead costs were estimated at \$9,450, of which the variable portion was \$0.50 per bat and the fixed portion was \$1.00 per bat with an estimate of 6,300 bats to be produced. Flagstaff identifies price variances at the earliest possible point in time.During March, the company had the following results:Direct labor used = 4,800 hours at a cost of \$56,400Actual manufacturing overhead fixed costs = \$6,000Actual manufacturing overhead variable costs = \$3,100Bats produced = 6,000InstructionsCompute the following variances for March.1. Labor quantity variance2. Total labor variancea3. Overhead controllable variancea4. Overhead volume variance2. Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for \$8. At the start of monthly production, Riggins estimated 9,500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo:Standard Quantity Standard PriceDirect materials 2.5 pounds \$3 per poundDirect labor 0.6 hours \$10 per hourDuring March 2013, the following activity was recorded by the company relating to the production of tybos:1. The company produced 9,000 units during the month.2. A total of 24,000 pounds of materials were purchased at a cost of \$66,000.3. A total of 24,000 pounds of materials were used in production.4. 5,000 hours of labor were incurred during the month at a total wage cost of \$55,000.InstructionsCalculate the following variances for March for Riggins, Inc.(a) Materials price variance(b) Materials quantity variance(c) Labor price variance(d) Labor quantity variance
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