Eric Company manufactures a small mp3 player called the Jogging Mate. The compan
ID: 2465726 • Letter: E
Question
Eric Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate mp3 player are as follows: During August, 9,125 hours of direct labor time were needed to make 19,100 units of the Jogging Mate. The direct labor cost totaled $52,925 for the month. Required: According to the standards. what direct labor cost should have been incured to make 19,100 units of the Jogging Male? By how much does this differ from the cost that was incurred? (Round Standard labor time per unit to 2 decimal places.) Break down the difference m cost from (1) above into a labor rate variance and a labor efficiency variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero variance).) The budgeted variable manufacturing overhead rate is $4.5 per direct labor-hour. During August, the company incurred $45,625 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (Do not round intermediate calculations and round your final answers to nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)Explanation / Answer
The image is blurred and data not legible, using best judgement to capture data Labor Hr/Unit Labor Rate Labor cost /unit Standard Labor cost details 0.45 6.00 2.70 1.0 Direct labor cost Variance August Details Amt$/Unit No of Units Manufactured 19,100.0 Standard Hrs per unit 0.45 Total Standard Labor Hrs allowed 8,595.0 Standard Direct Labor rate/Hr 6.0 Total Standard Direct Labor cost 51,570.0 Actual Direct Labor cost 52,925.0 Direct Labor cost Variance= 1,355.0 Unfavorable 2.0 Actual Labor hrs used 9,125.0 Actual Direct Labor Amt 52,925.0 Actual Labor Rate /hr 5.80 Direct Labor Rate Variance= Actual Hrs Used( Actual Rate-Std Rate) =9125*(5.80-6) 1,825 (F) Direct LAbor Efficiency Variance =Std Rate ( Actual Hrs used-Std Hrs for actual output) =6*(9125-8595) 3,180 (U) 3.0 Actual Labor hrs used 9,125.0 Actual variable OH Amt 45,625.0 Actual Variable OH rate /Labor hr= 5.0 Budgeted Variable OH rate/Labor Hr= 4.5 Variable Overhead Rate Variance= Actual Qty Used( Actual Rate-Std Rate) =9125*(5-4.5) 4,562.5 (U) Variable Overhead Efficiency Variance =Std Rate ( Actual Qty used-Std qty for actual output) =4.5*(9125-8595) 2,385.0 (U)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.