Barberry, Inc., manufactures a product called Fruta. The company uses a standard

Question

Barberry, Inc., manufactures a product called Fruta. The company uses a standard cost system and has established the following standards for one unit of Fruta:

The company produced 2,800 units during June.

There was no beginning inventory of materials; however, at the end of the month, 2,550 pounds of material remained in ending inventory.

The company employs 12 persons to work on the production of Fruta. During June, they worked an average of 170 hours at an average rate of $15.50 per hour.

Variable manufacturing overhead is assigned to Fruta on the basis of direct labor-hours. Variable manufacturing overhead costs during June totaled $6,800.

Compute the price and quantity variances.(Round your "price per pound" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

For labor employed in the production of Fruta:

Compute the rate and efficiency variances. (Round your "rate per hour" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Compute the variable overhead rate and efficiency variances.(Round your "rate per hour" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Explanation / Answer

Actual Price Standard Price × Actual Quantity = Variance Materials price variance 47250 8 7500 60000 -12750 F Actual Quantity Standard Quantity × Standard Price = Variance Materials quantity variance 4950 3920 8 1030 U Actual Rate Standard Rate × Actual Hours = Variance Labor rate variance 15.5 15 2040 1020 U Actual Hours Standard Hours × Standard Rate = Variance Labor efficiency variance 2040 2240 15 -3000 F Actual Rate Standard Rate × Actual Hours = Variance Variable overhead rate variance 3.33 3.5 2040 -340 F Actual Hours Standard Hours × Standard Rate = Variance Variable overhead efficiency variance 2040 2240 3.5 -700 F

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