req 1, req2, req3, req4, req5 & req6 5 Case 10-17 Working Backwards from Varianc
ID: 2547509 • Letter: R
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req 1, req2, req3, req4, req5 & req6
5 Case 10-17 Working Backwards from Variance Data [LO10-1, L010-2, LO10-3] 10 points Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system Standard Cost Standard Quantity or Hours Standard Price or Rate eBook Inputs per Direct materials 2.40 pounds "17.10 pound 41.04 15.30 $ 9.50 $65.84 Print 1.00 hours 15.30 hour Direct labor Variable manufacturing overhead Total standard cost per unit per Reference 1.00 hours 9.50 hour Total Variances Reported Quantity Standard Price or Cost* or Rate Efficiency Direct materials Direct labor Variable manufacturing overhead $656,640 $11,716F $34,200 U $244,800 $ 3,400U $15,300 U $152,000 $ 5,000F $?'U 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? 1. Number of units produced Pounds of direct material purchased and used in roduction 3. Actual cost per pound 4. Actual direct labor-hours 5. Actual rate per direct labor-hour 6. Actual variable manufacturing overhead costExplanation / Answer
1)Number of Units produced : Standard material cost /standard material cost per unit
= 656640/41.04
= 16000 units
**You can also calculate using direct labor or overhead
2)Material quantity variance =[SR*AQ-Standard cost
34200 = [17.10 * AQ ] -656640
34200 +656640 = 17.10AQ
AQ = 690840/17.10
= 40400 pounds
actual quantity purchased and used : 40400
3)Materia price variance : AQ[AR-SR]
-11716 = 40400 [AR- 17.10]
-11716 /40400 =[AR -17.10]
-.29 =AR -17.10
AR = 17.10 -.29 = $ 16.81 per pound
4)Labor efficiency variance :[SR *AH] -Standard cost
15300 = [15.3*AH] -244800
15300+244800 = 15.3AH
AH = 260100/15.3
= 17000 DLH
5)Labor rate variance :AH[AR-SR]
3400 = 17000[AR-15.30]
3 400/17000= AR-15.3
AR = .20+15.3 = $ 15.5 Per DLLH
6)Variable overhead efficiency variance :SR[AH-SH]
9.5 [17000-(16000*1)]
9.5 [17000-16000]
9.5*1000
9500U
Total variable overhead variance : 9500 U-5000F
= 4500U
Total variable overhead variance = actual variable overhead -standard overhead
4500 =AVO - 152000
AVO = 152000+4500 = $ 156500
actual variable overhead: 156500
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