Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its st

Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows:?

PA9-1 Calculating Direct Material, Direct Labor, Variable Overhead Variances [LO 9-3, 9-4. 9-5] Barley Hopp, Inc, manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Standard Price Quantity 1.70 Ibs. 1.80 per lb. 170 hrs 13.00 per hr 70 hrs. S1.10 per hr Standard Unit Cost $ 3.06 22.10 1.87 (Rate) Direct materials (clay) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($276,000.00 2.30 120,000.00 units) Barley Hopp had the following actual results last year Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct lahor cost Variable overhead cost Fixed overhead cost 125,000 218,200 S 370,940 170,000 $2,805,000 S 240,000 S 300,000 Required: 1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.) Direct Materia's Price Variance Direct Materia's Quantity Variance Direct Materials Spending Variance

Explanation / Answer

Actual output: 125000 units Std Qty allowed per unit: 1.70 unit Std qty allowed (125000*1.70): 212500 units Actual Qty: 218200 Std price per lbs: 1.80 Actual Price per lbs (370940/218200): 1.70 per unit Material price variance: Actual Qty (Std price-Actual price) 218200 (1.80-1.70) = 21820 Fav Material Qty variance: Std price (Std qty-Actual qty) 1.80 (212500-218200) = 10260 Unfav Material cost variance: Std qty*Std price - Actual Qty*Actual price 212500*1.80 - 218200*1.70 = 11560 Fav Std labor hours (125000*1.70); 212500 hours Std rate per hour: $ 13 per hour Actual hours: 170000 hours Actual rate per hour: (2805000/170000): 16.50 per hour Labour rate variance: Actual hourrs (Std rate-Actual rate) 170000 (13-16.50) = 595000 unfav Labor efficiency variance: Std rate (Std hours-Actual hours) 13 (212500 -170000) = 552500 Fav Labouor cost variance: Std hours*Std rate -Actual rate*Actual hours 212500*13 - 170000*16.50 = 42500 unfav Std variable OH rate per hour: 1.10 per hour Actual OH rate per hour (240000/170000): 1.412 per hour Variable OH ratee variance: Actual hourrs (Std rate-Actual rate) 170000*1.1 - 240000 = 53000 Unfav Variable OH efficiency variance: Std OH rate (Std hours-Actual hours) 1.10 (212500-170000) = 46750 Fav Variable OH cost variance: Std hours*Std rate - Actual variabel oh 212500 *1.10 - 240000 = 6250 unfav

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