Kropf Inc. has provided the following data concerning one of the products in its
ID: 2569877 • Letter: K
Question
Kropf 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.
8.00
The company has reported the following actual results for the product for September:
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September.
c. Compute the labor rate variance for September.
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead rate variance for September.
f. Compute the variable overhead efficiency variance for September.
(Input all amounts as positive values.)
Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials8.00
liters $ 7.60 per liter Direct labor 0.70 hours $ 19.70 per hour Variable manufacturing overhead 0.70 hours $ 6.50 per hourExplanation / Answer
1a) Material price variance (actual price - standard price)*AQ purchased (606,500 - 75600*7.60) 25100 U Material efficiency variance (AQ used - std qty allowed)*standard rate (81,630 - 10200*8)*7.60 228 U b) labor rate variance (actual rate - standard rate )*actual hours (138,302 - 6,600*19.70) 8282 U Direct labor Efficiency variance (actual hours - standard hours allowed)*standard rate (6,600 - 10200*.70)*19.70 10638 F c) Variable overhead rate variance (35,314 - 6600*6.50) 7,586 F Variable overhead Efficiency variance (6600-7,140)*6.50 3,510 F 2) Summary of variances material price variance 13,275 U material qty variance 420 F labor rate variance 1020 F labor efficiency variance 4,560 U variable overhead rate variance 960 U variable overhead efficiency variance 930 U net variance 18,285 U
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