Elements of Labor and Variable Overhead Variances Chelsea Fabricating applies va

Question

Elements of Labor and Variable Overhead Variances
Chelsea Fabricating applies variable overhead to products on the basis of standard direct labor hours. Presented is selected information for last month when 10,000 units were produced.

Required
Solve for items "a" through "h."

Do not round answers for items b. (standard hours/unit).

Direct labor Variable overhead Actual a. $Answer f. $Answer Standard hours/unit b. $Answer b.$Answer Actual hours (total) 6,200 6,200 Standard rate/hour $36.00 $24.00 Actual rate $37.80 Flexible budget $90,000 $60,000 Labor rate or variable overhead spending variance c. $Answer AnswerUF g. $Answer AnswerUF Efficiency variances d. $Answer AnswerUF h. $Answer AnswerUF Total flexible budget variance e. $Answer AnswerUF $2,500 F

Explanation / Answer

Req A: Actual Labour cost (Actual hours*Actual rate) 234360 (6200 hours*$37.80) Req b: Flexible Budget (Total Std cost) $90,000 Std rate per hour 36 Std Hours alloedd ($ 90,000 /36) 2500 Hours Req C: Labour rate variance = Actual hours (Std rate-Actual rate) 6200 hours (36.00-37.80)= $11,160 U Req d: Efficiency Variance= Std rate (Std hours-Actual hours) 36.00 (2500-6200)= $133,200 U Req e Total Flexible Budget Variancce= Std labour cost -Actual labour ccost 90,000 -234360 = $144,360 Req f: Std Variable OH cost (Flexible budget): $ 60,000 Flexible budget variane: $ 2500 F Flexible budget variance= Std variable OH cost -Actual variable cost 2500 = 60,000 - Actual Variable OH cost Actual Variable Oh cost = $57,500 Req b: Std Variable OH cost: $ 60,000 Std rate per hour: $ 24 Std Hours: (60,000/24):; 2500 hours Req g: Variable Oh rate variance= Aactual hours (Std OH rate-Actual Oh rate) 6200 hours *24- $ 57500 =91300 F Req h: Variable OH efficeincy variance= Std OH rate (Std hours-Actual hours) 24.00 (2500-6200)= $ 88,800 U

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