Vitalite, Inc., produces a number of products, including a body-wrap kit. Standa

Question

Vitalite, Inc., produces a number of products, including a body-wrap kit. Standard variable costs relating to a single kit are given below:

      During August, 530 kits were manufactured and sold. Selected information relating to the month’s production is given below:

What was the total standard cost of the materials used during August?

How many yards of material are required at standard per kit?

What was the materials price variance for August if there were no beginning or ending inventories of materials? (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

What is the standard direct labor rate per hour?

What was the labor rate variance for August? The labor efficiency variance? (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance))

What was the variable overhead rate variance for August? The variable overhead efficiency variance?(Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance))

Complete the standard cost card for one kit shown at the beginning of the problem. (Round your answers to 2 decimal places.)

Vitalite, Inc., produces a number of products, including a body-wrap kit. Standard variable costs relating to a single kit are given below:

Explanation / Answer

(1) Total Standard cost of material = $12,800

(2) Yards of material per kit as per standard = 12800/500/5 = $5.12

(3) Material price variance = 15000 - 12000 = $3000F

(4) Standard direct labor rate = $0.85 per DLB

(5)
Labor rate variance = 9000 - 9360 = $360U

Labor efficiency variance = 8500 - 9000 = $500U

(6)

Variable O/H rate variance = 1800 - 1720 =80F

Variable O/H Efficiency variance = 1700 - 1800 = $100U

(7)

Direct Material: 5.12 x $5 per yard = $25.6

Direct labor: 0.85 hours x $20 per hour = $17

Overhead: 0.85 hours x 4 = $3.4

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