PA9-1 Calculating Direct Material, Direct Labor, Variable Overhead Variances [LO
ID: 2437629 • Letter: P
Question
PA9-1 Calculating Direct Material, Direct Labor, Variable Overhead Variances [LO 9-3, 9-4, 9-5) Chapter 9 GRADEO Honesork Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows Standard Standard Price Quantity .70 lbs. 180 per Ib 1.70 hrs. $10.00 per hr. Standand Unit Cost 3.06 17.00 1.87 (Rate) Direct materials (clay) Direct labor Variable manufacturing overhead (based on 1.70 hrs 1.10 per hr direct labor hours) Flxed manufacturing overhead ($402,500.00+ 2.30 175,000.00 units) Barley Hopp had the following actual results last year 180,000 328.200 $ 623,580 225,000 $3,082,500 $ 350,000 $ 400,000 Number of units produced and sold Number of pounds of clay uned Cost of clay Number of labor hours worked Direct labor cost Variable overhead cost Flxed overhead cost Required 1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. (Do not round your intermediato calculations. Indicate the effect of each variance b selecting "F for favorable and "U" for unfavorable.) Direct Materials Price Variance Direct Materials Quantity Variance Direct Matorials Spending VarianceExplanation / Answer
1. Direct Material Price Variance = (Standard Rate- Actual rate)*Actual Quantity
= (1.8-1.9)*328200 = 32,820 U
Actual rate = 623,580/328,200 = 1.9
Direct Material Quantity Variance = (Standard Quantity- Actual Quantity)*Standard Rate
=(306,000-328200)*1.8 = 39,960 U
Standard Quantity = 1.7*180,000 = 306,000
Direct Material Spending Variance = Direct Material Price Variance + Direct Material Quantity Variance = 72,780 U
2.Direct Labour Rate Variance = (Standard rate - Actual rate)*Actual Hours
=(10-13.7)*225,000 = 832,500 U
Direct Labour Efficiency Variance = (Standard Hours - Actual Hours)*Standard Rate
=(306,000-225,000)*10 = 810,000 F
Direct Labour Spoending Variance = Direct Labour rate variance + Direct labour efficiency variance
= 22,500 U
3. Variable Overhead rate Variance = (1.1-1.56)*225,000 = 103,500 U
Actual Rate = 350,000/225000 = 1.56
Variable Overhead Effiiency Variance = (306,000-225000)1.1 = 89,100 F
Variable Overhead Spending Variance = Varieble Overhead Rate Variance + Variable Overhead Efficiency Variance = 14,400 U
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.