File Edit View History Bookmarks Window Help ezto.mheducation.com 2. 24.00 point

Question

File Edit View History Bookmarks Window Help ezto.mheducation.com 2. 24.00 points Zee Corporation has developed the following cost standards for the production of its leather backpacks: Standard Cost Per Backpack Leather (0.8 yardsx $37 per yard) Direct labor (1.1 hours $22.00 per hour) Variable overhead (1.1 hours $25.60 per hour) $29.60 $24.20 $28.16 Variable overhead at Zee is applied on the basis of direct labor hours. The actual results for last month were as Number of backpacks produced Direct labor hours incurred Yards of leather purchased Yards of leather used in production Cost of leather purchased Direct labor cost Variable overhead cost 6,500 6,590 6,360 5,620 $228,642 $140,367 $171,340 The direct materials purchases variance is computed when the materials are purchased Required: Compute the following variances for Zee. a. Materials price variance.

Explanation / Answer

a.

material price variance = (actual quantity purchased X Actual price ) - (actual quantity purchased X standard price)

= 228642 - ( 6360 X 37 )

= 6678 U

b.

Material quantity variance = Standard price ( actual quantity - standard quantity)

= 37 ( 5620 - ( 6500 X .8 ) )

= 15540 U

c.

Labor efficiency variance = Standard rate per hr. ( Actual hrs - std hrs.)

= 22 ( 6590 - (6500 X 1.1) )

= 12320 F

d.

variable overhead rate variance = variable overhead cost - ( actual labor hours X standard rate per hr)

= 171340 - (6590 X 25.60)

= 2636 U

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

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