Hellier Contractors paints interiors of residences and commercial structures. Th

Question

Hellier Contractors paints interiors of residences and commercial structures. The firm's management has established cost standards per 100 square feet of area to be painted.

Direct material ($18 per gallon of paint)

$1.50   

Direct labor

2.00

Variable overhead

0.60

Fixed overhead (based on 600,000 square feet per month)

1.25

Management has determined that 400 square feet can be painted by the average worker each hour. During May, the company painted 600,000 square feet of space and incurred the following costs:

Direct material (450 gallons purchased and used)

$ 8,300.00

Direct labor (1,475 hours)

12,242.50

Variable overhead

3,480.00

Fixed overhead

7,720.00

1. What is the standard quantity (SQ) (gallons) of paint that was budgeted to paint the 600,000 SF?

2. Determine the material price variance (MPV) (do not include a negative sign or words in your answer)

3. Determine the material quantity variance (MQV) (do not include a negative sign or words in your answer)

4. Determine the Total Material Variance (do not include a negative sign or words in your answer)

5. What were the standard hours (SH) that were budgeted to paint the 600,000 SF?_______ DLH (do not include words in your answer)

6. Determine the labor rate variance (LRV) (do not include a negative sign or words in your answer)

7. Determine the labor efficiency variance (LEV) (do not include a negative sign or words in your answer)

8. Determine the Total Labor Variance (do not include a negative sign or words in your answer)

9. Determine the Variable overhead spending variance (do not include a negative sign or words in your answer)

10. Determine the Variable overhead efficiency variance (do not include a negative sign or words in your answer)

11. Determine the Total Variable Overhead Variance (do not include a negative sign or words in your answer)

12. Determine the Fixed overhead spending variance (do not include a negative sign or words in your answer)

13. Determine the Volume variance (do not include a negative sign or words in your answer)

14. Determine the Total Fixed Overhead Variance (do not include a negative sign or words in your answer)

Direct material ($18 per gallon of paint)

$1.50   

Direct labor

2.00

Variable overhead

0.60

Fixed overhead (based on 600,000 square feet per month)

1.25

Explanation / Answer

Solution:

1. Standard Quantity for 600,000 SF -

2. Material Price Variance

3. Material Quantity Variance

4. Total Material Variance

Standard Data 100 SF 600,000 SF Working for 600,000 SF Direct Material $ 1.5 $ 9,000 1.5/100*9,000 Per SF - $ $ 0.015 $ 0.015 1.5/100 will be per SF Standard Quantity 0.083 gallon 500 gallons 1.5/18 will be standard quantity for 1 SF, similarly, 1.5/18*600,000=500

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