??.8 Homework Problem F Based on a standard volume of output of 96,000 units per
ID: 2394385 • Letter: #
Question
??.8 Homework Problem F Based on a standard volume of output of 96,000 units per month, the standard cost per unit of the product manufactured by Tahoe Company consists of: Direct materials (0.25 pounds x S8 per pound) Direct labor (0.5 hours x S7.60 per hour) Variable manufacturing overhead Fixed manufacturing overhead (S144,000 in total) Total $2.00 3.80 2.50 1.50 $9.80 A total of 25,200 pounds of materials was purchased at $8.40 per pound. During May, 98,400 units were produced with the following costs: Direct materials used (24,000 pounds at S8.40)S201,600 Direct labor (50,000 hours at $7.80) Variable manufacturing overhead Fixed manufacturing overhead 390,000 249,000 145,000 Compute the materials price and usage variances, the labor rate and efficiency variances, and thie overhead budget and volume variances. (Overhead is applied based on units produced.) Alternate problems Alternate problem A The following data apply to Roseanne Company for August, when 2,500 units were produced: Materials used: 16,000 pounds Standard materials per unit: 6 pounds at S5.00 per pound Materials purchased: 24,000 pounds at $4.80 per pound Direct labor: 5,800 hours at a total cost of $69,600 Standard labor per unit: 2 hours at S11 per hour Compute the materials and labor variances. Discuss possible explanations for the variances you calculated (meaning, what might have happened?)Explanation / Answer
PART 1:
A. Materials Price Variance :
=Actual Quantity x (Standard rate - Actual rate)
=24000 x ($8 - $8.40)
=9600 U
B. Materials quantity usage variance:
=Standard rate x (Standard quantity - Acual Quantity)
=$8 x [(98400 x 0.25) - 24000]
=4800 F
C. Labour rate variance:
=Actual hours paid x (Standard rate - Actual rate)
=50000 x ($7.60 - $7.80)
=10,000 U
D Labour efficiency variance:
=Standard rate x (Standard hours - Actual hours paid)
=$7.60 x [(98400 x 0.5) - 50000]
=6080 U
E Overhead budget variance:
=Budgeted overheads - Actual overheads
=[(96000 x $2.5) + $144,000] - [$249,000 + $145,000]
=384,000 - 394,000
=10,000 U
F. Overhead volume variance:
= Budgeted rate per hour x (Standard hours - Budgeted hours)
= [($2.50 + $1.50) / 0.5 hours] x [(98400 x 0.5) - (96000 x 0.50)]
= 8 x 1200
= 9600 F
G.Fixed Overhead spending variance:
Fixed overhead spending variance=(Actual fixed overhead - Budgeted fixed overhead)
=145,000-144,000
=1000F
PART 2:
ALTERNATE PROBLEM:
A. Materials Price Variance :
=Actual Quantity x (Standard rate - Actual rate)
=16000(5-4.8)
=3200F
B. Materials quantity usage variance:
=Standard rate x (Standard quantity - Acual Quantity)
=5x(24,000-16,000)
=40,000.
C. Labour rate variance:
=Actual hours paid x (Standard rate - Actual rate)
=5800x(11-12)
= 5800A
D Labour efficiency variance:
=Standard rate x (Standard hours - Actual hours paid)
=11 x [(2500x2) - 5800]
=8800A
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.