Beakins Company produces a single product. The standard and actual costs for the
ID: 2474970 • Letter: B
Question
Beakins Company produces a single product. The standard and actual costs for the recent period follow:
Standard Costs
Direct materials (4 yards @ $5 per yard)
$20
Direct labor (1.5 hours @ $10 per hour)
$15
Variable Manufacturing overhead (1.5 hours @ $4 per hour)
$ 6
Actual Costs
Direct materials purchased (6,000 yards)
$28,500
Direct materials used in production
5,000 yds
Direct labor cost incurred (2,100 hours)
$17, 850
Variable manufacturing overhead cost incurred
$10,080
Units produced
1,200
The company records are variances at the earliest possible point in time. Variable manufacturing overhead costs are applied to products on the basis of direct labor hours.
The variable overhead spending variance for the period is:
a) $1,680f
b) $1,140 U
c) $1,140F
d) $1,680 u
The variable overhead efficiency variance for the period is
a) $1,200U
b) $1,200F
c) $1,440 U
d) $1,440 F
Standard Costs
Direct materials (4 yards @ $5 per yard)
$20
Direct labor (1.5 hours @ $10 per hour)
$15
Variable Manufacturing overhead (1.5 hours @ $4 per hour)
$ 6
Actual Costs
Direct materials purchased (6,000 yards)
$28,500
Direct materials used in production
5,000 yds
Direct labor cost incurred (2,100 hours)
$17, 850
Variable manufacturing overhead cost incurred
$10,080
Units produced
1,200
Explanation / Answer
The variable overhead spending variance for the period is: D is correct- $1,680 U
The variable overhead efficiency variance for the period is: A is correct - $ 1,200 U
Working as below
Variable overhead Spending Variance (standard Cost-Actual Cost) Standard Cost 2100*4 8400 Actual Cost 10,080 Variable overhead Spending Variance 1,680 U Variable overhead Efficiency Variance (standard hour for actual output-Actual Hour)*standard price (1200*1.5-2100)*4 1200 URelated Questions
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