4. Sunshine Manufacturing designs and manufacturers rototillers for cities durin

Question

4. Sunshine Manufacturing designs and manufacturers rototillers for cities during the spring. Variable manufacturing overhead costs are based on machine hours. Sunshine Manufacturing recorded the following data for its rototiller production line during the month of May Standard variable overhead rate per machine hour $6.00 Budgeted machine hours Actual machine hours Actual variable overhead cost per machine hour 3,740 4,960 What is the variable manufacturing overhead rate variance in May? A. $18,700 favorable. B. $24,800 favorable C. $18,700 unfavorable. D. $24,800 unfavorable. 5. Firth Company has collected the following data for its scarf line of products: 13 feet $3.00 per foot 50,000 feet 4,500 Direct materials standard quantity per scarf Actual direct materials used Actual output of scarves What is the direct materials quantity variance? A. $25,500 favorable. B. $28,500 favorable. C. $28,500 unfavorable. D. $25,500 unfavorable.

Explanation / Answer

CALCULATION OF THE STANDARD PRICE PER UNIT Standard Quantity Standard Rate (Per Foot) Standard Material Cost per unit 13 $                     3.00 $                            39.00 Calculation of Standard Material Cost for 4500 units Standard Unit (KG) Standard Rate (Per Foot) Standard Material Cost 58500 $                     3.00 $                1,75,500.00 (4,500 Unit X 13Feet) Calculation of the Actual Cost for producing 4,500 Units   Actual Qty Actual Rate Actual Material Purchase 50000 Matrial Quantity Variance = (Standard Quantity - Actual Qunatity ) X Standard Cost Matrial Quantity Variance = (58.500 Feet - 50,000 Feet ) X $ 3 Matrial Quantity Variance = 8,500 Feet X $ 3 Matrial Quantity Variance = $                          25,500 Favorable Answer = Option A = $ 25,500 Favourable

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