The standard cost sheet for a product is shown. The company produced 3,000 units

Question

The standard cost sheet for a product is shown.

The company produced 3,000 units that required:

• 17,300 pounds of material purchased at $4.35 per pound

• 6,550 hours of labor at an hourly rate of $11.81 per hour

• Actual overhead in the period was $15,660

Fill in the Budget Performance Report for the period. Some amounts are provided. Round your answers to the nearest dollar. However, do not round your intermediate calculations.

Split the direct materials variance into the materials price varaince and the materials usage variance. Remember that you want to isolate the price variance from the quantity variance so be sure to use factors that do not overlap. Also remember that the two variances should equal the total material variance.

Split the direct labor variance into the labor price variance and the labor efficiency variance. Remember that you want to isolate the price variance from the efficiency variance so be sure to use factors that do not overlap. Also remember that the two variances should equal the total labor variance.

Manufacturing variances are period costs that are rolled into - Select your answer -revenuecost of salesassetsliabilitiesCorrect 17 of Item 3 and reported on the - Select your answer -balance sheetincome statementCorrect 18 of Item 3 . A favorable variance is recorded as a - Select your answer -debitcreditCorrect 19 of Item 3 and an unfavorable variance is recorded as a - Select your answer -debitcreditCorrect 20 of Item 3.

Manufacturing Costs
Standard price
Standard Quantity Standard Cost
per unit Direct materials $4.50 per pound 5.60 pounds $ 25.20 Direct labor $11.51 per hour 2.20 hours $ 25.32 Overhead $2.30 per hour 2.20 hours $ 5.06 $ 55.58

Explanation / Answer

material price variance = (SP - AP)*AH = (4.5 - 4.35) * 17300 = 2595 F

material quantity variance = (SQ - AQ)* SP = (16800 - 17300)*4.5 = 2250 U

NOTE: standard hours = 3000 * 5.6 = 16800

labor rate variance = (SR-AR)*AH = (11.51 - 11.81) * 6550 = 1965 U

labor efficiency variance = (SH - AH) * SR = (6600 - 6550)*11.51 = 345.3 F

Note: standard hours = 3000*2.2 = 6600

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