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Variances Costs Total Standard Cost Price Quantity LINK TO TEXT LINK TO TEXT LIN

ID: 2478211 • Letter: V

Question

Variances

Costs

Total Standard Cost

Price

Quantity

LINK TO TEXT

LINK TO TEXT

LINK TO TEXT

LINK TO TEXT

You have been given the following information about the production of Horatio Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations.
Standard Cost Card Direct materials (5 pounds at $3 per pound) $15.00 Direct labor (0.8 hours at $7) 5.60 Variable overhead (0.8 hours at $4 per hour) 3.20 Fixed overhead (0.8 hours at $8 per hour) 6.40 $30.20
The following is a variance report for the most recent period of operations.

Variances

Costs

Total Standard Cost

Price

Quantity

Direct materials $407,200 $7,985 F $9,420 U Direct labor 183,900 5,550 U 7,460 U

Explanation / Answer

=(407,200 +9,420)/3

=138,873 hours

=(407,200+9420 – 7985)/138,873

=$2.94 per kg

=27,337 hours


e) $7.20 per hour

  1. Number of units = 407,200/15 = 27,147 units
  1. pounds of raw materials purchased

=(407,200 +9,420)/3

=138,873 hours

  1. cost

=(407,200+9420 – 7985)/138,873

=$2.94 per kg

  1. (183,900+ 7460)/7

=27,337 hours


e) $7.20 per hour