Fastic Corporation makes a product with the following standard costs: Standard u
ID: 2572693 • Letter: F
Question
Fastic Corporation makes a product with the following standard costs: Standard uantity Standard Pic Standard Cost or Hours 6.9 liters 0.3 hours 0.3 hours or Rate S5.00 per liter $17.00 per hour $6.00 per hour Per Unit $34.50 $5.10 $1.80 Inputs Direct materials Variable overhead.... The company reported the following results concerning this product in August. 8,600 units 8.400 units 58.330 liters 2.310 hours 62,500 liters $4.90 per liter $17.10 per hour ....S5.50 per hour Originally budgeted output Actual output. Raw materials used in production Actual direct labor-hours . . Actual price of raw materials... Actual direct labor rate Actual variable overhead rate The materials price variance is recognized when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the direct labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance. TTT Paragraph # Arial # 3(12pt) :--i- , T-Explanation / Answer
Material price variance AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U Material price variance = (AP-SP)*AQ AP = Actual price per unit = $4.9 SP = Standard price per unit = $5 AQ = Actual quantity consumed= 58330 F= Favourable U = Unfavourable Material price variance AP (a) SP (b) Variance (c=b-a) AQ (d) Total variance (e=c*d) F/U 4.9 5 0.1 58330 5833 F Material quantity variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U Material quantity variance = (AQ-SQ)*SP AQ = Actual quantity consumed= 58330 SQ = Standard quantity = 8400*6.9 = 57960 SP = Standard price per unit = $5 F= Favourable U = Unfavourable Material quantity variance AQ (a) SQ (b) Variance (c=b-a) SP (d) Total variance (e=c*d) F/U 58330 57960 -370 5 -1850 U Labor Rate variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U Labor Rate variance = (AR-SR)*AH AR = Actual Rate per hour = $17.1 SR = Standard Rate per hour = $17 AH = Actual hours = 2310 F= Favourable U = Unfavourable Labor Rate variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U 17.1 17 -0.1 2310 -231 U Labor Efficiency variance AH (a) SH (b) Variance (c=b-a) AR (d) Total variance (e=c*d) F/U Labor Efficiency variance = (AH-SH)*AR AH = Actual hours = 2310 SH = Standard Hours = 8400*0.3 = 2520 SR = Standard Rate per hour = $17 F= Favourable U = Unfavourable Labor Efficiency variance AH (a) SH (b) Variance (c=b-a) SR (d) Total variance (e=c*d) F/U 2310 2520 210 17 3570 F VOH spending variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U VOH spending variance = (AR-SR)*AH AR = Actual Rate per hour = $5.5 SR = Standard Rate per hour = $6 AH = Actual hours = 2310 F= Favourable U = Unfavourable VOH spending variance AR (a) SR (b) Variance (c=b-a) AH (d) Total variance (e=c*d) F/U 5.5 6 0.5 2310 1155 F VOH efficiency variance AH (a) SH (b) Variance (c=b-a) SR (d) Total variance (e=c*d) F/U VOH efficiency variance = (AH-SH)*SR AH = Actual hours = 2310 SH = Standard Hours = 8400*0.3 = 2520 SR = Standard Rate per hour = $6 F= Favourable U = Unfavourable VOH efficiency variance AH (a) SH (b) Variance (c=b-a) Price (d) Total variance (e=c*d) F/U 2310 2520 210 6 1260 F
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