Problem 11-6 (Part Level Submission) XO-20 is an oil-based product used to remov

Question

Problem 11-6 (Part Level Submission)

XO-20 is an oil-based product used to remove rust on bolts and nuts that are stuck. Its accounting system uses standard costs. The standards per 0.50-liter can of solution call for 0.80 liters of material and 4 hours of labor. (0.80 liters of material are needed due to evaporation in the production process.) The standard cost per liter of material is $2.40. The standard cost per hour for labor is $14.00. Overhead is applied at the rate of $14.17 per can. Expected production is 7,800 cans with fixed overhead per year of $30,966 and variable overhead of $10.20 per unit (a 0.50-liter can).

During 2018, 8,600 cans were produced; 12,300 liters of material were purchased at a cost of $52,890; 9,500 liters of material were used in production. The cost of direct labor incurred in 2018 was $403,200, based on an average actual wage rate of $12 per hour. Actual overhead for 2018 was $114,100.

(b) Your answer is partially correct. Try again. Calculate material, labor, and overhead variances. (Round intermediate calculations to 2 decimal places, e.g. 14.37 and final answers to O decimal places, e.g. 125. Enter all variances as a positive number.) Material Price Variance Unfavorable Material Quantity Variance Unfavorable Labor Rate Variance 67200 Favorable g } Labor Efficiency Variance Favorable Controllable Overhead Variance Favorable Overhead Volume Variance Favorable

Explanation / Answer

$ Materials Price Variance 23,370 Unfavorable Materials Quantity Variance 6,288 Unfavorable Labor Rate Variance 67,200 Favorable Labor Efficiency Variance 11,200 Favorable Controllable Overhead Variance 4,586 Favorable Overhead Volume Variance 3,176 Unfavorable

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