Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its st

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) 1.70 lbs.--- $ 1.80 per lb.--- $ 3.06

Direct labor 1.70 hrs. $ 13.00 per hr. 22.10

Variable manufacturing overhead

(based on direct labor hours) 1.70 hrs. $ 1.10 per hr. 1.87

Fixed manufacturing overhead ($276,000.00 ÷ 120,000.00 units) 2.30

Barley Hopp had the following actual results last year:

Number of units produced and sold 125,000.00

Number of pounds of clay used 218,200.00

Cost of clay $ 370,940.00

Number of labor hours worked 170,000.00

Direct labor cost $ 2,805,000.00

Variable overhead cost $ 240,000.00

Fixed overhead cost $ 300,000.00

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

Particulars Standard Actual Qty Rate amount Qty Rate amount Materials    212,500.00           1.80        382,500.00    218,200.00            1.70        370,940.00 Labour    212,500.00    13.0000    2,762,500.00    170,000.00          16.50    2,805,000.00 Overhead    212,500.00           1.10        233,750.00    170,000.00       1.4118        240,000.00 Actual output    125,000.00 Materials reqd(125000*1.7)    212,500.00 Labour hrs reqd(125000*1.7)    212,500.00 DMPV = (SP-AP)*AQ DMPV = (1.8 - 1.7)218200 DMPV = 21820 F DMQV= (SQ-AQ)SP DMQV= (212500 - 218200)1.8 DMQV= 10,260 U DLRV= (SR-AR)AH DLRV= (13-16.50)170000 DLRV= 595,000 U DLEV = (SH-AH)SR DLEV = (212500 - 170000)13 DLEV = 552,500 F VORV = (SR-AR)AH VORV = (1.1-1.4118)170000 VORV = 53,000U VOEV = (SH-AH)SR VOEV = (212500 - 170000)1.1 VOEV = 46,750 F

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