PA9-1 Calculating Direct Material, Direct Labor, Variable Overhead Variances [LO

Question

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 Standard Quantity 1.70 lbs. 1.80 per lb 1.70 hrs. $10.00 per hr 1.70 hrs.1.10 per hr (Rate) Unit Cost 3.06 Direct materials (clay) Direct labor 17.00 1.87 2.80 Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($392,000.00 + 140,000.00 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 labor cost Variable overhead cost Fixed overhead cost 145,000 258,200 $ 438,940 190,000 $2,508,000 $ 280,000 $ 410,000 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 Materials Price Variance Direct Materials Quantity Variance Direct Materials Spending Variance

Explanation / Answer

Direct materials price variance 25820 F =438940-(258200*1.8) Direct materials quantity variance 21060 U =1.8*(258200-145000*1.7) Direct materials spending variance 4760 F =438940-(145000*3.06)

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