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

Actual Quantity = 10,000 pairs of jeans

Standard Quantity = 10,000 * 2 = 20,000 yards

Actual Quantity = 20,500 yards.

Actual Rate = $428400/24000 = $17.85

Material price variance = (18-17.85)*20500 = 0.15*20500 = $3075 Favorable

Material Quantity variance = (20000-20500)*18 = 500*18 = $9000 Unfavorable.

Standard Hours = 10000*0.5 = 5000 hours

Actual Hours = 5250 hours

Actual rate = 100800/5250 = $19.2

Labor rate variance = (20-19.2)*5250 = $4200 Favorable

Labor Efficiency variance = (5250-5000)*20 = 5000 Unfavorable

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