24. Blackburn, Inc. manufactures pottery for sales to customers. Cost for the ma

Question

24. Blackburn, Inc. manufactures pottery for sales to customers. Cost for the manufacturer of pottery were as follows: Actual costs Standard costs Direct materials Direct labor Factory overhead 1,600 lbs. at $32 4,500 hrs. at $11.80 1,500 lbs. at $35 4,800 hrs. at $11 Rates per labor hour, based on 100% of normal capacity of 5,500 labor hrs. $12,300 variable cost $19,250 fixed cost Variable cost $2.40 Fixed cost $3.50 Use the format as illustrated in class and: a. Compute the two Direct materials variances. Label the variances. b. Compute the two Direct labor variances Label the variances c. Compute the two Factory overhead variances. Label the variances.

Explanation / Answer

Req 1: Std qty rewuired for actual output (SQ) = 1500 lbs Std price per lbs (SP) $35 Actual Qty consumed for actual ouput (AQ) 1600 lbs Actual price per lbs (AP) $ 32 Material price variance = AQ (SP-AP ) 1600 ( 35-32) = $ 4800 fav Material Quantity Variance = SP (SQ -AQ) 35 ( 1500 -1600 ) = $ 3500 unfav Req 2: Std hours required fo actual output (SH) 4800 hrs Std rate per hour (SR) $ 11 per hour Actual hours worked (AH) 4500 hrs Actual rate pe hour (AR) $ 11.80 per hour Labour rate variance= AH (SR-AR)                                               4500 ( 11-11.80 ) = $ 3,600 unfav Labour Efficiency variance = SR (SH-AH) 11 ( 4800-4500 ) = $ 3,300 fav Req 3: Std labour hours required for actual ouput (SH) 4800 hours Std Variable overheads rate per hour (SR)   $ 2.40 per hour Actual Hours worked (AH) 4500 hours Actual variable overhead rate per hour (12300/4500) (AR) $ 2.73 per hour Variable Spending variance = AH (SR -AR ) 4500 ( 2.40- 2.733) = $ 1,500 unfav Variable overhead efficiency variance = SR (SH -AH) 2.40 ( 4800-4500 ) = $ 7,200 fav

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

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