ezto.mheducation.com Files Chapter 10 Homework Erie Company Manufactures A Small

Question

ezto.mheducation.com Files Chapter 10 Homework Erie Company Manufactures A Small Mp3 Player Calle... Chegg.com 20.00 points Erie Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate mp3 player are as follows: Standard Hours 24 minutes Standard Rate per Hour $6.20 Standard Cost $2.48 During August, 8,570 hours of direct labor time were needed to make 19,900 units of the Jogging Mate. The direct labor cost totaled $51,420 for the month. Required: 1. According to the standards, what direct labor cost should have been incurred to make 19,900 units of the Jogging Mate? By how much does this differ from the cost that was incurred? (Round Standard labor time per unit to 2 decimal places.) Number of units manufactured Standard labor time per unit Total standard hours of labor time allowed Standard direct labor rate per hour 19,900 7,950.00 158,205,000 6.20 980,871,000 Total standard direct labor cost Actual direct labor cost Standard direct labor cost 980,871,000 Total variance-unfavorable 0.871,000 2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency variance. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect(i.e., zero variance). Do not round intermediate calculations.)

Explanation / Answer

1 Number of units manufactured =      19,900 Standard labor time per time (24 minutes / 60 min per hour) =           0.40 Total standard hours of labor time allowed =         7,960 Standard direct labor rate per hour = $       6.20 Total standard direct labor cost = $ 49,352 Actual direct labor cost = $ 51,420 Standard direct labor cost = $ 49,352 Total variance - unfavourable = $    2,068 2 Labor rate variance = Actual hours X (Actual rate - Standard rate) = 8,570 hours ( $6 - $6.20) = $    1,714 F Actual rate = $51,420 / 8,570 = $ 6 Labor efficiency variance = Standard rate X (Actal hours - Standard hours) = $6.20 X (8,570 hours - 7,960 hours ) = $    3,782 U 3 Variable overhead rate variance = (Standard rate X Actual hours) - Actual variable overhead cost = ($4.30 x 8,570)- $42,850 = $    6,000 F Variable overhead efficiency variance = Standard rate X (Actal hours - Standard hours) = $4.30 X (8,570 hours - 7,960 hours ) = $    2,623 U

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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