Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its st
ID: 2445592 • 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) 1.70 lbs. $ 1.80 per lb. $ 3.06 Direct labor 1.70 hrs. $ 10.00 per hr. 17.00 Variable manufacturing overhead (based on direct labor hours) 1.70 hrs. $ 1.10 per hr. 1.87 Fixed manufacturing overhead ($402,500.00 ÷ 175,000.00 units) 2.30 -------------------------------------------------------------------------------- Barley Hopp had the following actual results last year: Number of units produced and sold 180,000.00 Number of pounds of clay used 328,200.00 Cost of clay $ 623,580.00 Number of labor hours worked 225,000.00 Direct labor cost $ 3,082,500.00 Variable overhead cost $ 350,000.00 Fixed overhead cost $ 400,000.00
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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 material price variance=
Direct material quantity variance =
Direct material spending var=
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.) DL rate variance=
DL efficiency variance=
DL labor spending var=
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.) Variable OH rate=
variable overhead efficieny variance =
variable overhead spending var=
Explanation / Answer
1. Direct material price variance= actual cost- standard cost
= 623,580- (328,200*1.80)= $32,820 U
Direct material quantity variance= (AQ*SP)- (SQ*SP)
= (328,000*1.80)- (1.70*180,000*1.80)= $39,600 U
Direct material spending variance= AP*AQ- SP*AQ= 623,580- 590,760= $32,820 U
2. Direct labor rate variance= AH*AR- AH*SR
= 3,082,500- (225000*10)= $832,500 U
Direct labor efficiency variance= AH*SR- SH*SR
= (225,000*10) - (306,000*10)= $810,000 F
Direct labor spending variance= (AR- SR) AH= $832,500 U
3. Variable overhead spending variance= Actaul overhead ependiture-( Actual hour*standard rate)
= 350,000- (225000*1.10)= $102,500 U
Variable overhead efficiency variance= SH* SR- (AH *SR)
= (306,000*1.10) - (225,000* 1.10)= $89,100 F
Variable overhead rate= AH*AR- AH*SR
= 350,000- (225000*1.10)= $102,500 U
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