ter 10 Exercises ) Erle Company manufactures a mobile fitness device called the

Question

ter 10 Exercises ) Erle Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The abor standards that have been set for one Jogging Mate are as follows During August, 8,310 hours of direct labor time were needed to make 19,500 units of the Jogging Mate. The direct labor cost totaled $49,860 for the month. Required 1. What is the standard labor-hours allowed (SH) to makes 19,500 Jogging Mates? 2. What is the standard labor cost allowed (SH SR) to make 19,500 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.10 per direct labor-hour. During August, the company incurred $39,888 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, indicate the effect of each variance by selecting "F for favorable, "U for unfavorable, and "None" for no effect (i.e, zero variance). Input all amounts as positive values. Do not round intermediate calculations.) Standard labor-hours allwed 2 Standard labor cost allowed 3 Labor spending varancae Labor eficiency variance variable overthead rate Variable overhead efficiency variance

Explanation / Answer

1) Standard hour allowed = 19500*24/60 = 7800 hour

2) Standard cost allowed = 7800*6.2 = 48360

3) Labour spending variance = 48360-49860 = 1500 U

4) Labour rate variance = (6.2*8310-49860) = 1662 F

Labour efficiency variance = (7800-8310)*6.2 = 3162 U

5) Variable overhead rate variance = (4.1*8310-39888) = 5817 U

Variable overhead efficiency variance = (7800-8310)*4.1 = 2091 U

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.