Problem A Jazzy Jeans uses standard costing in their accounting system. They hav

Question

Problem A

Jazzy Jeans uses standard costing in their accounting system. They have developed the following standards for men's jeans

                                                                                Std Qty                        Std Price

Direct materials (yards)                                         2 18.00 per yard

Direct labor (hours)                                              0.5                                 20.00 per hour

During November, Jazzy produced 10,000 pairs of jeans.

Activity for the month was:

                                                                                    Quantity                                 Total cost

Purchased material (in yards) 24,000.00                                428,400.00

Material used 20,500.00

Hours worked by direct laborers 5,250.00 100,800.00

1. What was the material price variance for the month?

2. What was the materials quantity variance for the month?

3. What was the labor efficiency variance for the month?

4. What was the labor rate variance for the month?

Problem B

Jazzy Jeans applies manufacturing overhead using machine hours as the cost driver.

Fixed MOH costs are budgeted at $1,000,000 per month.

Variable MOH costs are budgeted at $52.80 per machine hour.

It takes .25 machine hours to produce a pair of jeans.

Jazzy budgeted production of 10,000 pairs of Jeans in December.

Actual activity in December:

Total Variable MOH Costs       134,767.50

Total Fixed MOH Costs            988,000.00

Actual pairs of jeans made      10,500

Actual machine hours                 2,550

5. What was the variable overhead spending variance for the month?

6. What was the variable overhead efficiency variance for the month?

7. How much fixed MOH was applied in December?

8. What was the fixed overhead spending variance for the month?

9. What was the fixed overhead volume variance for the month?

Show your work in all your answers.

Please can I have your help.... Thank you sooo much....

Explanation / Answer

There are 2 different problem so I will answer only problem A with all its subparts.

(1) Material price variance = (SP – AP) AQ

= (18 – 17.85) x 20500 = $3075 (Favaorable)

(2) Material quantity variance = (SQ – AQ) SP

= (20000 – 20500) x 18 = $9000 (Unfavaorable)

(3) Labor efficiency variance = (SH – AH) SR

= (5000 – 5250) x 20 = $5000 (Unfavaorable)

(4) Labor rate variance = (SR – AR) AH

= (20 – 19.2) x 5250 = $4200 (Favaorable)

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