Standard Quantity or Hours Standard Price or Rate $1.60 per Direct materials Dir

Question

Standard Quantity or Hours Standard Price or Rate $1.60 per Direct materials Direct labor Variable overhead 4.5 kilos 0.8 hours 0.8 hours kilo hour hour $26.60 per $6.60 per In January, the company produced 6,400 units using 30,340 kilos of the direct material and 5,060 direct labor-hours. During the month, the company purchased 32,720 kilos of the direct material at a total cost of $60,900. The actual direct labor cost for the month was $132,140 and the actual variable overhead cost was $32,469. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar.) Required a. Compute the materials quantity variance laterials quantity variance b. Compute the materials price variance terials price variance c. Compute the labor efficiency variance abor efficiency variance d. Compute the labor rate variance Labor rate variance e. Compute the variable overhead efficiency variance. riable overhead efficiency variance

Explanation / Answer

a. Direct Material Usage Variance = (Standard Quantity-Actual Qauntity used)*Standard Price = (28800-30340)*1.60 = $             2,464 Unfavorable Working: Standard Quantity for actual output = Actual Output*Standard Quantity per unit = 6400 * 4.5 =               28,800 b. Direct Material Price Variance = (Standard Price-Actual Price)*Actual Material quantity purchased = (1.60-1.86)*32720 = $             8,507 Unfavorable Working: Actual Material Price = Actual material cost/Actual material purchased = $           60,900 / 32720 = $               1.86 c. Direct Labor usage Variance = (Standard Direct Labor hours-Actual direct Labor hours)*Standard direct Labor rate = (5120-5060)*26.60 = $             1,596 Favorable Working: Standard direct labor hours = Actual Output*Standard labor hours per unit = 6400 * 0.8 = 5120 d. Direct Labor rate Variance = (Standard Rate-Actual Rate)*Actual Direct Labor hours used = (26.60-26.11)*5060 = $             2,479 Favorable Working: Actual direct labor rate = Actual direct labor cost/Actual direct labor hours = $       1,32,140 / 5060 = $             26.11 e. Variable Overhead efficiency variance = (Standard Direct Labor hours-Actual direct Labor hours)*Standard variable overhead rate = (5120-5060)*6.60 = $                 396 Favorable

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.