Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its st
ID: 2444896 • Letter: B
Question
Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Quantity Standard Price (Rate) Standard Unit Cost
Direct materials (clay) 1.80 lbs. $ 1.90 per lb. $ 3.42
Direct labor 1.80 hrs. $ 16.00 per hr. 28.80
Variable manufacturing overhead (based on direct labor hours) 1.80 hrs. $ 1.10 per hr. 1.98
Fixed manufacturing overhead ($487,500.00 ÷ 195,000.00 units) 2.50
Barley Hopp had the following actual results last year:
Number of units produced and sold 200,000.00
Number of pounds of clay used 368,200.00
Cost of clay $ 736,400.00
Number of labor hours worked 245,000.00
Direct labor cost $ 5,806,500.00
Variable overhead cost $ 390,000.00
Fixed overhead cost $ 470,000.00
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.)
2. Calculate the direct labor rate, efficiency, 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.)
3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)
Explanation / Answer
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.)
1) Materials price variance = (Actual price - Standard Price) *Actual Quantity
Materials price variance = (736400/368200-1.90)*368200
Materials price variance = $ 36820 Unfavorable
2). Materials usage/quantity variance = (Actual Quantity Used- Standard Quantity)Standard Price
Materials usage/quantity variance = (368200 - 200000*1.80)*1.90
Materials usage/quantity variance = $ 15580 Unfavorable
3) Total Materials spending variance = ( Actual price*Actual Quantity - Standard Price*Standard Quantity)
Total Materials spending variance = (736400 - 1.90*200000*1.80)
Total Materials spending variance = $ 52400 Unfavorable
2. Calculate the direct labor rate, efficiency, 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.)
1) Labor rate variance = (Actual Rate-Standard Rate)*Actual Hour
Labor rate variance = (5806500/245000 - 16 )*245000
Labor rate variance = $ 1886500 Unfavorable
2) Labor efficiency variance = (Actual Hour-Standard Hour )Standard Rate
Labor efficiency variance = (245000 - 200000*1.80)*16
Labor efficiency variance = 1840000 Favorable
3) Total Labor spending variance = (Actual Rate*Actual Hour - Standard Rate* Standard Hour)
Total Labor spending variance = (5806500 - 16*200000*1.80)
Total Labor spending variance = $ 46500 Unfavorable
3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)
1) variable overhead rate variance = (Actual Rate-Standard Rate)*Actual Hour
variable overhead rate variance = (390000/245000 - 1.10 )*245000
variable overhead rate variance = $ 120500 Unfavorable
2) variable overheadefficiency variance = (Actual Hour-Standard Hour )Standard Rate
variable overhead efficiency variance = (245000 - 200000*1.80)*1.10
variable overhead efficiency variance = 126500 Favorable
3) variable overhead spending variance = (Actual Rate*Actual Hour - Standard Rate* Standard Hour)
variable overhead spending variance = (390000 - 1.1*200000*1.80)
variable overhead spending variance = $ 6000 favorable
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.