Your Corporation makes a product with the following standard costs: INPUTS STAND
ID: 2527790 • Letter: Y
Question
Your Corporation makes a product with the following standard costs:
INPUTS
STANDARD QUANTITY OR HOURS
STANDARD PRICE OR RATE
Direct Materials
5.3 kilos
$ 6.00 per kilo
Direct labor
0.5 hours
$10.00 per hour
Variable Overhead
0.5 hours
$ 4.00 per hour
The company reported the following results concerning this product in August:
Actual output
2,100 units
Raw materials used in production
10,850 kilos
Purchases of raw materials
11,800 kilos
Actual direct labor-hours
1,100 hours
Actual cost of raw materials purchases
$ 73,160
Actual direct labor cost
$ 10,560
Actual variable overhead cost
$ 4,510
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for August is:
.
The following standards for variable manufacturing overhead have been established for a company that makes only one product:
Standard hours per unit of output
2.7 hours
Standard variable overhead rate
$ 13.05 per hour
The following data pertain to operations for the last month:
Actual hours
2,400 hours
Actual total variable manufacturing overhead cost
$ 30,360
Actual output
600 units
What is the variable overhead efficiency variance for the month?
INPUTS
STANDARD QUANTITY OR HOURS
STANDARD PRICE OR RATE
Direct Materials
5.3 kilos
$ 6.00 per kilo
Direct labor
0.5 hours
$10.00 per hour
Variable Overhead
0.5 hours
$ 4.00 per hour
Explanation / Answer
Answer:
variable overhead efficiency variance for the month=$ 10179 Unfavorable
Working notes for the above answer is as under
variable overhead efficiency variance
=(standard hour-Actual hour) x Slandered rate
=( (600*2.7)-2400) x 13.05
=(1620-2400) x 13.05
=780x 13.05
=$ 10179 Unfavorable
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.