Helix Company produces several products in its factory, including a karate robe.
ID: 2451633 • Letter: H
Question
Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 1,045 direct labor-hours each month and produce 2,090 robes. The standard costs associated with this level of production are as follows:
Variable manufacturing overhead
(based on direct labor-hours)
$ 30.90
During April, the factory worked only 900 direct labor-hours and produced 1,900 robes. The following actual costs were recorded during the month:
Variable manufacturing overhead
At standard, each robe should require 3.00 yards of material. All of the materials purchased during the month were used in production.
Compute the materials price and quantity variances for April: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places.)
Compute the labor rate and efficiency variances for April: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places.)
Compute the variable manufacturing overhead rate and efficiency variances for April: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places.)
Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 1,045 direct labor-hours each month and produce 2,090 robes. The standard costs associated with this level of production are as follows:
Variance Materials price variance Variance Materials quantity varianceExplanation / Answer
SOLUTION
DIRECT MATERIAL
QTY
RATE (TOTAL/QTY OR HOURS)
TOTAL
6270
7.9
49533
STANDARD
(2090*3)
6400
6.95
44460
ACTUAL
5073
VARIANCE
DIRECT LABOUR
1045
10.00
10450
STANDARD
900
10.98
9880
ACTUAL
570
VARIANCE
VARIABLE OVERHEAD
1045
4.4
4598
STANDARD
900
4.86
4370
ACTUAL
228
VARIANCE
MATERIAL PRICE VARIANCE
AQ X (SPX AP)
(7.9-6.95)*6400
6,100.00
F
MATERIAL QUANTITY VARIANCE
(SQ - AQ)X SP
(6270-6400)*7.9
-1027
U
LABOUR RATE VARIANCE
(SR - AR)XAH
(10-10.98)*900
-880
U
LABOUR EFFICIANCY VARIANCE
(SH - AH) X SR
(1045-900)*10
1,450.00
F
VARIABLE OVERHEAD RATE VARIANCE
(SR - AR)XAH
(4.4-4.86)*900
- 410.00
U
VARIABLE OVERHEAD EFIICIANCY VARIANCE
SH - AH X SR
(1045-900)*4.4
638
F
DIRECT MATERIAL
QTY
RATE (TOTAL/QTY OR HOURS)
TOTAL
6270
7.9
49533
STANDARD
(2090*3)
6400
6.95
44460
ACTUAL
5073
VARIANCE
DIRECT LABOUR
1045
10.00
10450
STANDARD
900
10.98
9880
ACTUAL
570
VARIANCE
VARIABLE OVERHEAD
1045
4.4
4598
STANDARD
900
4.86
4370
ACTUAL
228
VARIANCE
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