Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its st

Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Standard Price Quantity .60 lbs.1.70 per lb. 1.60 hrs. 12.00 per hr. Standard Unit Cost $ 2.72 19.20 1.76 (Rate) Direct materials (clay) Direct labor Variable manufacturing overhead (based on .60 hrs. 1.10 per hr. direct labor hours) Fixed manufacturing overhead ($450,000.00 + 3.00 150,000.00 units) Barley Hopp had the following actual results last year Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct labor cos Variable overhead cost Fixed overhead cost 155,000 278,200 S 445,120 200,000 53,000,000 S 300,000 S 470,000 Required: 1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.) Diroct Matorials Prico Varianco Direct Matorials Quantity Variance Direct Materials Spending Variance 2. Calculate the direct labor rate, efriciency, and total spending variances for Barley Hopp. (Do not round your iIntermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.) Direct Labor Rate Variance Direct Labor ElTiciency Variance Direct Labor Spending Variance

Explanation / Answer

1) Direct material price variance = (1.7*278200-445120) =27820 F

Direct material quantity variance = ( 155000*1.6-278200)*1.7 = 51340 U

Direct material cost variance = (155000*2.72)-445120 = 23520 U

2) Labour rate variance = (12*200000-3000000) = 600000 U

Labour efficiency variance = (155000*1.6-200000)*12 = 576000 F

Labour cost variance = (155000*19.20)-3000000 = 24000 U

3) Variable overhead rate variance = (1.1*200000-300000) = 80000 U

Variable overhead efficiency variance = (155000*1.6-200000)*1.1 = 52800 F

Variable overhead cost variance = (155000*1.76)-300000 = 27200 U

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