lce Box Gourmet, Inc., produces containers of frozen food. During April, The com

Question

lce Box Gourmet, Inc., produces containers of frozen food. During April, The company produced 770 cases of food and incurred the following actual costs. Variable overhead Fixed overhead Actual labor cost (6,000 direct-labor hours) Actual material cost (13,000 pounds purchased $ 6,600 18,100 123,000 23,400 and used) Overhead is budgeted and applied using direct-labor hours. Standard cost and annual budget information are as follows Standard Costs per Case $140.00 Direct material (15 pounds at $1.50) 22.50 Variable overhead (7 hours at $1.40 9.80 21.00 Direct labor (7 hours at $20) Fixed overhead (7 hours at $3) $193.30 Annual Budget Information Variable overhead Fixed overhead Planned activity for $98,000 $210,000 70,000,direct-labor hours year Required: 1. Compute the following cost variances from the available data. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). Do not round intermediate calculations. Round "Variable-overhead efficiency variance" to 2 decimal places.) Direct-material price variance Direct-material purchase price variance Direct-material quantity variance Direct-labor rate variance Direct-labor efficiency variance Variable-overhead spending variance Variable-overhead efficiency variance Fixed-overhead budget variance Fixed-overhead volume variance

Explanation / Answer

Standard material quantity used per unit of output: 15 pounds Actual output: 770 units Standnard quantity allowed for actual output 11550 pounds Actual quantity purchased or used 13000 pounds Standard material rate per pound 1.5 per pound Actual material rate per pound 1.8 per pound Material price variance: Actual Quantity usedd (Std price -A ctual price) 13000 (1.5 -1.80 ) =3900 U Material purchase price variance: Actual quantity purchased (Std price- actual price) 13000 (1.50 -1.80 ) = $3900 U Direct Material Quantity Variance: Std price (Standard quantity- Actual quantity) 1.50 (11550 -13000) = $2,175 U Std hours required: 5390 DLH Std rate per hour $ 20 per DLH Actual hours worked 6000 DLH Actual rate per hour $20.50 per DLH Labour rate variance: Actual hours (Std rate - Actual rate) 6000 ( 20.00 -20.50) = $3,000 U Labour efficiency Variance: Std rate (Std hours - Actual Hours) 20.00 (5390- 6000) = $ 12,200 U Variable Spending variance: Actual hours (Std OH rate- Actual rate) 6000 (1.40 -1.10)= $ 1800 F Variable Efficiency variance: Std rate (Std hours - Actual hours) 1.40 (5390-6000)= $854 U Fixed OH budget variance: Budgeted Fixed OH - Actual fixed OH (210000/12)- 18100 = $ 600 U Fixed OH volume variance: Std OH allowed- Budgeted OH 5390*3   - 17500 = $1330

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

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