Silmon Corporation makes a product with the following standard costs: In June th

Question

Silmon Corporation makes a product with the following standard costs: In June the company produced 4, 700 units using 20, 990 grams of the direct material and 2, 510 direct labor-hours. During the month the company purchased 24, 600 grams of the direct material at a price of $4. 80 per gram. The actual direct labor rate was $12. 60 per hour and the actual variable overhead rate was $1. 90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: (Input all amounts as positive values. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i. e., zero variance). Omit the "$" sign in your response.)

Explanation / Answer

Std Qty Std price DM 4.2 5 DL 0.5 12 Var ohs 0.5 2 DM Quantity Variance = ( SQ AQ ) × SP Where,    SQ is the standard quantity allowed    AQ is the actual quantity of direct material used    SP is the standard price per unit of direct material SQ= 4700*4.2 19740 (19740-20990)*5 -6250 U b) DM Price Variance = ( SP AP ) × AQ Where,    SP is the standard unit price of direct material    AP is the actual price per unit of direct material    AQ is the actual quantity of direct material used (5-4.8)*20990 4198 F DL Efficiency Variance = ( SH AH ) × SR Where,    SH are the standard direct labor hours allowed    AH are the actual direct labor hours used    SR is the standard direct labor rate per hour SH= 4700*.5 2350 -1920 U DL Rate Variance = ( SR AR ) × AH Where,    SR is the standard direct labor rate    AR is the actual direct labor rate    AH are the actual direct labor hours -1506 U

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.