Vitex, Inc. manufactures a popular consumer product and it has provided the foll
ID: 2526747 • Letter: V
Question
Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:
*Applied to Work in Process during the period.
The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.
Required:
1. How many units were produced last period?
2. How many pounds of direct material were purchased and used in production?
3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.)
4. How many actual direct labor-hours were worked during the period?
5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)
6. How much actual variable manufacturing overhead cost was incurred during the period?
Inputs (1) Standard Quantity or Hours (2)Standard
Price
or Rate Standard
Cost
(1) × (2) Direct materials 2.30 pounds $ 17.10 per pound $ 39.33 Direct labor 1.00 hours $ 15.90 per hour $ 15.90 Variable manufacturing overhead 1.00 hours $ 9.30 per hour $ 9.30 Total standard cost per unit $ 64.53
Explanation / Answer
1. No of units produced = Total standard cost/standard cost per unit =786,600/39.33= 20,000 units
2. Pounds of direct material Purchased and used in production:
Material quantity variance = (standard quantity-actual quantity) standard price
-34,200 = (20,000*2.30-X) 17.10
-34,200 = (46,000-x) 17.10
-34,200 = 786,600-17.10X
17.10X = 820,800
X (actual quantity purchased and used) = 48,000 pounds
3. Actual cost per pound:
Material price variance = (standard price-actual price) actual quantity
13,920 = (17.10-X) 48,000
13,920 = 820800-48,000X
48,000X = 806,880
X (actual cost per pound) = 16.81
4.) Calculate actual direct labor hours worked:
Direct labor efficiency variance = (standard hours-actual hours) standard rate
-4,200= (20,000-X) 15.90
-4,200 = 318,000-15.90X
15.90X = 322,200
X (actual direct labor hours) = 20,264.15 Hours
5. Actual rate per direct labor hour:
Labor rate variance = (standard rate-actual rate) actual hours
-48,000 = (15.90-X) 20,264.15
-48,000 = 275400-20.26415X
20.26415X =323,400
X) (Actual rate per directlabour hour) = 15959.2 per hour
6) Actual variable overhead cost:
Actual variable overhead = standard overhead+Unfavourable variance
= 186000+1943.405
Unfavorable variance =20,000- 20,264.15
=-264.15*9.30=-2456.595
=-2456.595+4400
Unfavorable variance =1943.405
Actual variable overhead = 186000+1943.405
Actual variance overhead = 20,543.405
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