Vitex, Inc. manufactures a popular consumer product and it has provided the foll

Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system (1) Standard Quantity or Standard Price or Rate Standard Cost Inputs Direct materials Direct labor Variable manufacturing overhead Hours 2.40 pounds 1.00 hours 1.00 hours $16.60 per pound $16.10 per hour 9.40 per hour $ 39.84 16.10 $9.40 $65.34 Total standard cost per unit Variances Reported Price Standard Quantity or or Rate Efficiency Cost" $677,280$. 12,412 F $33,200 U $273,700 $3,600 U 16,100 U $159,800 4,400 F Direct materials Direct labor Variable manufacturing overhead Applied to Work in Process during the period The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored. Required: 1. How many units were produced last period? 2. How many pounds of direct material were purchased and used in production? 3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.) 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.) 6. How much actual variable manufacturing overhead cost was incurred during the period? 1. Number of units produced 2. Pounds of direct material purchased and used in production 3. Actual cost per pound 4. Actual direct labor-hours 5. Actual rate per direct labor-hour 6. Actual variable manufacturing overhead cost

Explanation / Answer

Solution 1:

Standard cost of material = $677,280

Standard price of material = $16.60

Standard quantity of material for actual production = $677,280 / $16.60 = 40800 pound

Standard quantity of material per unit = 2.40 pound

Actual number of unit produced = Standard qty of material / Standard qty per unit = 40800 / 2.40 = 17000 units

Solution 2:

Material quantity variance = $33,200 U

(SQ - AQ) * SP = -$33,200

(40800 - AQ) * $16.60 = -$33,200

Actual quantity of material purchased and used in production = 42800 pound

Solution 3:

Material price variance = $12,412 F

(SP - AP) * AQ = $12,412

($16.60 - AP) * 42800 = 12,412

Actual cost per pound = $16.31 per pound

Solution 4:

Direct labor efficiency variance = $16,100 U

(SH - AH) * SR = -$16,100

(17000 * 1 - AH) * $16.10 = -$16,100

AH = 18000 hours

Actual direct labor hours = 18000 hours

Solution 5:

Direct labor rate variance = $3,600 U

(SR - AR) * AH = -$3,600

($16.10 - AR) * 18000 = -$,3600

Actual rate per direct labor hour = $16.30 per hour

Solution 6:

Variable overhead efficiency variance = (SH - AH) * SR = (17000 - 18000) * $9.40

= $9,400 U

Actual variable manufacturing overhead cost = Standard cost - Variable overhead rate variance - Variable overhead efficiency variance

= $159,800 - $4,400 F - $9,400 U

= $164,800

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