Silmon Corporation makes a product with the following standard costs: In June th
ID: 2456853 • Letter: S
Question
Silmon Corporation makes a product with the following standard costs:
In June the company produced 4,900 units using 21,810 grams of the direct material and 2,530 direct labor-hours. During the month the company purchased 24,800 grams of the direct material at a price of $8.80 per gram. The actual direct labor rate was $16.60 per hour and the actual variable overhead rate was $1.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.
In June the company produced 4,900 units using 21,810 grams of the direct material and 2,530 direct labor-hours. During the month the company purchased 24,800 grams of the direct material at a price of $8.80 per gram. The actual direct labor rate was $16.60 per hour and the actual variable overhead rate was $1.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.
Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: (Input all amounts as positive values. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Silmon Corporation makes a product with the following standard costs:
Explanation / Answer
Direct Material
Direct Labour
Variable Overhead
Direct Material Actual Production (Units) 4900 Standard Quantity of Direct Material Required per unit (grams) 4.4 Standard Quantity of Direct Material required (SQ): 4900*4.4 21560 Standard Price per Pound (SP) 9 Actual Direct Material Purchased(AQ) 24800 Acual Price per Pound (AP) 8.8 Direct Material Price Variance=AQ*(SP-AP): 24800*(9-8.80) 4960 favourable Direct materials quantity variance SP*(SQ-AQ) : 9*(21560-24800) -29160 UnfavourableRelated Questions
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