Fle Edit View History Bookmarks Develop Window Help hapter 10 Homework Help S 5
ID: 2566678 • Letter: F
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Fle Edit View History Bookmarks Develop Window Help hapter 10 Homework Help S 5 Koontz Company manufactures a number of products. ctual cost data for May The standards relating to one of these products are shown below, along with Cost per materials: standards 1.90 feet at $4.20 per foot Actual: 1.85 feet at $4.60 per foot 7.98 Direct Standarda .95 hours at $17.00 per hour Actuali 1.00 hours at s 0 per houe 6.50 Variable overheed Standardi 0.95 hours at $5.00 per hour Aetuala 2.00 houra at $4.60 per hour Total cost per nit Excess of actual cost over tandard cost per mit The production superintendent was pleased when he saw this report and commented. "This $0.73 excess cost is well within the 4 nt limit management has set for acceptable variances. it's obvious that there's not much to worry about with this product for the month was 18,000 units. Variable overhead cost is assigned lo products on the basis of direct labor-hours There were no beginning or ending inventories of materias Required: t. Compute the following variances for May a. Materials price and quantity variances b. Labor rate and efficiency variances c. Variable overhead rate and efficlency variances 2. How much of the $073 excess unit cost is traceable to each of the variances computed in () above 3. How much of the $0.73 excess unit cost is traceable to apparent inefficient use of labor time? Complete this question by entering your answers in the tabs below. 0Explanation / Answer
Actual Cost Standard Cost AQ x AP AQ x SP SQ x SP 33,300 x $4.60 33,300 x $4.20 34,200 x $4.20 $153,180 $139,860 $143,640 $13,320 $3,780 Direct materials price variance 13320 Unfavorable Direct materials quantity variance 3780 Favorable Total direct materials variance $9,540 Unfavorable Actual Cost Standard Cost AH AR AH SR SH SR 18,000 $16.50 18,000 $17.00 17,100 $17.00 $297,000 $306,000 $290,700 $9,000 ($15,300) Direct labor rate variance 9000 Favorable Direct labor efficiency variance 15300 Unfavorable Total direct labor variance $6,300 Unfavorable Actual Cost Standard Cost AH AR AH SR SH SR 18,000 $4.60 18,000 $5.00 17,100 $5.00 $82,800 $90,000 $85,500 $7,200 ($4,500) Direct labor rate variance 7200 Favorable Direct labor efficiency variance 4500 Unfavorable Total direct labor variance $2,700 Favorable Materials: Quantity variance ($3,780 ÷ 18,000 units) $0.21 F Price variance ($13,320 ÷ 18,000 units) 0.74 U $0.53 U Labor: Efficiency variance ($15,300 ÷ 18,000 units) 0.85 U Rate variance ($9,000 ÷ 18,000 units) 0.50 F 0.35 U Variable overhead: Efficiency variance ($4,500 ÷ 18,000 units) 0.25 U Rate variance ($7,200 ÷ 18,000 units) 0.40 F 0.15 F Excess of actual over standard cost per unit $0.73 U Both the labor efficiency and variable overhead efficiency variances are affected by inefficient use of labor time. Excess of actual over standard cost per unit $0.73 U Less portion attributable to labor inefficiency: Labor efficiency variance 0.85 U Variable overhead efficiency variance 0.25 U 1.10 U Portion due to other variances $0.37 F
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