Help Save&Exlt; Submlt Check my work Standard Standard Rate ndard Hours 30 minut
ID: 2430741 • Letter: H
Question
Help Save&Exlt; Submlt Check my work Standard Standard Rate ndard Hours 30 minutes per Hour $6.28 Cost 53.19 10 During August. 10 180 hours of direct labor time were needed to make 19,200 units of the Jogging Mate The direct abor cost totaled points $61080 for the month eBook Hint Pnnt Required: 1 What is the standard labor-hours allowed (SH) to makes 19 200 Jogging Mates? 2 What is the standard labor cost allowed iSH SRI to make 19,200 Jogging Mates? 3. What is the labor spending variance 4 What Is the labor rate variance and the labor efficiency vartance? 5. The budgeted variable manufacturing overhead rate is $470 per direct labor-hour During August, the company incurred $54.972 in eterencvarable manufacturin g overhead cost. Compute the vanable overhead rate and efficiency varlances for the month FI for fovorable, "U" for unfavorable, and "None" (For requlrements 3 through 5, Indicate the effect of each varlance by selecting for no effect (l.e., zero varlance). Input alil amounts as positive values. Do not round Intermediate calculations.) Standard labor-haurs allowed 2 Siandard labor cost allowed 3 Labor spending varlance 4 Labor rate vanance 240 PM Latior efticiency variance variable overmead rate variance Vatiable ovénead eficien 7/25/2018Explanation / Answer
Answer 1.
Standard labor hours allowed = Number of units produced * Standard labor hours required per unit
Standard labor hours allowed = 19,200 * 0.50
Standard labor hours allowed = 9,600
Answer 2.
Standard labor cost allowed = Standard labor hours allowed * Standard labor rate per hour
Standard labor cost allowed = 9,600 * $6.20
Standard labor cost allowed = $59,520
Answer 3.
Labor Spending Variance = Actual labor cost - Standard labor cost allowed
Labor Spending Variance = $61,080 - $59,520
Labor Spending Variance = $1,560 Unfavorable
Answer 4.
Labor Rate Variance = Actual labor cost - Actual labor hours * Standard labor rate per hour
Labor Rate Variance = $61,080 - 10,180 * $6.20
Labor Rate Variance = $2,036 Favorable
Labor Efficiency Variance = Actual labor hours * Standard labor rate per hour - Standard labor cost allowed
Labor Efficiency Variance = 10,180 * $6.20 - $59,520
Labor Efficiency Variance = $3,596 Unfavorable
Answer 5.
Standard variable overhead cost allowed = Standard labor hours allowed * Standard variable overhead rate per hour
Standard variable overhead cost allowed = 9,600 * $4.70
Standard variable overhead cost allowed = $45,120
Variable Overhead Rate Variance = Actual variable overhead cost - Actual labor hours * Standard variable overhead rate per hour
Variable Overhead Rate Variance = $54,972 - 10,180 * $4.70
Variable Overhead Rate Variance = $7,126 Unfavorable
Variable Overhead Efficiency Variance = Actual labor hours * Standard variable overhead rate per hour - Standard variable overhead cost allowed
Variable Overhead Efficiency Variance = 10,180 * $4.70 - $45,120
Variable Overhead Efficiency Variance = $2,726 Unfavorable
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