Johnson Manufacturing makes a specialty product and has developed the following
ID: 2453205 • Letter: J
Question
Johnson Manufacturing makes a specialty product and has developed the following standard costing information:
Direct materials 2 lbs $ 8.50 per lb.
Direct labor 1.5 hrs $11.00 per hour
Variable support rate $28.50 per direct labor hour
Actual production for September used the following resources:
Units manufactured 3,000
Direct materials used in production 6,125 lbs $ 51,756.25
Direct labor 4,435 hrs $ 49,893.75
Actual variable support $128,526.30
Calculate the following variances:
Direct material price variance
Direct material quantity variance
Total direct material variance
Direct labor rate variance
Direct labor efficiency variance
Total direct labor variance
Variable support rate variance
Variable support efficiency variance
Total variable support variance
Explanation / Answer
Particulars Standard Actual Qty Rate amount Qty Rate amount Materials 6,000.00 8.50 51,000.00 6,125.00 8.45 51,756.25 Labour 4,500.00 11.0000 49,500.00 4,435.00 11.25 49,893.75 Overhead 4,500.00 28.50 128,250.00 4,435.00 28.98 128,526.30 Actual output 3,000.00 Materials reqd(3000*2) 6,000.00 Labour hrs reqd(3000*1.5) 4,500.00 Total Direct Mat Var = 128,250 - 128,526.50 Total Direct Mat Var = 276.30 U DMPV = (SP-AP)*AQ DMPV = (8.5-8.45)6125 DMPV = 306.25 F DMQV= (SQ-AQ)SP DMQV= (6000-6125)8.5 DMQV= 1062.5U Total DL Variance = Std cost - Actual Cost Total DL Variance = 49500 - 49,893.75 Total DL Variance = 393.75 DLRV= (SR-AR)AH DLRV= (11-11.25)4435 DLRV= 1108.75 U DLEV = (SH-AH)SR DLEV = (4500-4435)11 DLEV = 715 F Variable Support Variance= Std Var cost- Actual Var Cost Variable Support Variance= 128250 - 128526.30 Variable Support Variance= 276.30 U VORV = (SR-AR)AH VORV = (28.5-28.98)4435 VORV = 2128.80U VOEV = (SH-AH)SR VOEV = (4500-4435)28.50 VOEV = 1852.50 F
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