masters co applies on overhead using machine hours and reports the following inf

Question

masters co applies on overhead using machine hours and reports the following information compute the total variable overhead cost variance.

actual machine hours used 4,950 hours

standard machine hours       5,000 hours

actual variable overhead rate per hour $4.10

standard variable overhead rate per hour $4.00

2) ten pro reports the following on one of its products compute the direct materials price and quantity variances.

direct materials standard (4lbs@$2/lb) $8 per finished unit

actual direct materials used        150,000lbs

actual finished units produced     30,000 units

actual cost of direct materials used $267,500

Explanation / Answer

1) total variable overhead cost variance = 5000 * 4.0 - 4950 * 4.10 = 295 Unfavourable

2) actual price = 267500/30000 = 8.917

direct materials price varinace = ( 8 - 8.917) * 30000 = 27510 unfavourabel

direct materials quantity variance = ( 30000 *4 - 150000) * 2 = 60000

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