Fortes Inc. has provided the following data concerning one of the products in it

Question

Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.

The company has reported the following actual results for the product for April:

Required:

a. Compute the materials price variance for April.

b. Compute the materials quantity variance for April.

c. Compute the labor rate variance for April.

d. Compute the labor efficiency variance for April.

Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 10.0 ounces $ 8.10 per ounce Direct labor 0.5 hours $ 24.70 per hour Variable manufacturing overhead 0.5 hours $ 6.40 per hour

Explanation / Answer

a.

b.

c.

d.

Material Price variance = Actual Quantity purchased* (Actual Price - Standard Price) Material Price variance = 50,200 * (($386,210/50,200) - $8.10) Material Price variance = $20,410 F

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