Helix Company produces several products in its factory, including a karate robe.
ID: 2379362 • Letter: H
Question
Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 3,900 robes. The standard costs associated with this level of production are as follows:
Variable manufacturing overhead
(based on direct labor-hours)
$ 24.06
During April, the factory worked only 755 direct labor-hours and produced 4,000 robes. The following actual costs were recorded during the month:
Variable manufacturing overhead
At standard, each robe should require 3.2 yards of material. All of the materials purchased during the month were used in production.
Compute the materials price and quantity variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
Compute the labor rate and efficiency variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round your intermediate calculations. Round your final answers to the nearest dollar.)
Compute the variable manufacturing overhead rate and efficiency variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 3,900 robes. The standard costs associated with this level of production are as follows:
Explanation / Answer
1
Material price variance= (Standard Price-Actual Price)*Actual Qty
= (20.16/3.2 - 84000/14000)*14000
= $4200 Favorable
Material Quantity variance= (Standard Qty -Actual Qty )*Standard Price
= (4000*3.2 - 14000)*6.3
= $7560 Unfavorable
2
Labour rate variance= (Standard Rate-Actual Rate)*Actual Hour
= (12870/780-14000/755)*755
= $1542.50 Unfavorable
Labour efficiency variance= (Standard Hour -Actual Hour )*Standard Rate
= (780*4000/3900 - 755)*16.50
= $742.50 Favorable
3
Variable Overhead rate variance= (Standard Rate-Actual Rate)*Actual Hour
= (2340/780-7200/755)*755
= $4935 Unfavorable
Variable Overhead efficiency variance= (Standard Hour -Actual Hour )*Standard Rate
= (780*4000/3900 - 755)*3
= $135 Favorable
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.