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X how to snapshot on windov 1 e Accounting question I cheg | + -) O | eztom.heoucation.com/hm.tpx Erie Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. T he labor standards that have been set tor one logging Mate mpa player are ss tollaws: Hours 24 minutes Standard Rate per Hour $8.40 Standar Cosl S2.56 During August, 8,320 hours of direct labor time were needed to make 19,100 units of the Jogging Mate. The direct labor cost totaled 551,584 for the month Required: 1 According to the standards, what direct lahor cost should have been incurred to make 19,100 units of the Jugging Malu? By how much docs lhis dime' torn the cost lhal was incrred? Round Standard labor time per unlt to 2 decimal places.) N:imber units manutachired Standard lator time per uni Toll standard hours of labor time allowed Standard direct labor rate per hour Tolal staridard direct lbor cos Actual dirgct labor cost Staridard dirgct labor cost 2. Break down th dfference n cost from (1) above into a labor rste vanance and a labor etticiency vanance (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect i.e., zero variance). Do not round intermediate calculations.) Labor rate variance

Explanation / Answer

1) Number of units manufatured 19100 Standard labor time per unit 24 minutes Total standard hours of labor time allowed 7640 Standard direct labor rate per hour $             6.40 Total standard direct labor cost $        48,896 Actual direct labor cost $        51,584 Standard direct labor cost $        48,896 Total variance-unfavorable $          2,688 [U] 2) Direct labor rate variance = Actual hours*(Actual direct labor rate-Standard direct labor rate) = 8320*(51584/8320-6.4) = $          1,664 [F] Direct labor efficiency variance = Standard direct labor rate*(Actual hours - Standard hours allowed) = 6.4*(8320-7640) = $          4,352 [U] 3) VOH rate variance = Actual hours*(Actual VOH rate-Standard VOH rate) = 8320*(39936/8320-4.5) = $          2,496 [U] VOH efficiency variance = Standard VOH rate*(Actual hours - Standard hours allowed) = 4.5*(8320-7640) = $          3,060 [U]

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