/ The following standard costs were developed for one of the products of Razmata
ID: 2592508 • Letter: #
Question
/ The following standard costs were developed for one of the products of Razmatazz Corporation: STANDARD COST CARD PER UNIT Materials: 4 feet × S 14.25 per foot Direct labor: 8 hours $10 per hour Variable overhead: 8 direct labor hours x $8 per hour Fixed overhead: 8 direct labor hours x $12 per hour Total standard cost per unit 57.00 80.00 64.00 $297.00 The following information is available regarding the company's operations for the period Units produced: 11,000 52,000 feet @ $13.95 per foot 40,000 feet 84,000 hours costing $840,000 Materials purchased Materials used: Direct labor: Manufacturing overhead incurred: $756,000 $1,000,000 Variable Fixed Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours. Required: a. Calculate the materials price variance. b. Calculate the materials usage variance. c. Calculate the direct labor rate variance d. Calculate the direct labor efficiency variance. e. Calculate the variable manufacturing overhead spending variance. f. Calculate the variable manufacturing overhead efficiency variance. g Calculate the fixed manufacturing overhead spending variance. h. Calculate the fixed manufacturing overhead volume variance.Explanation / Answer
Per Chegg guidelines, 4 sub-parts have been answered.
a. Direct material price variance $15600 Favorable (AQ x AR) - (AQ x SR) = (52000 x $13.95) - (52000 x $14.25) = $725400 - $741000 = $15600 b. Direct material usage variance $57000 Favorable (AQ x SR) - (SQ x SR) = (40000 x $14.25) - (44000 x $14.25) = $570000 - $627000 = $57000 SQ = 11000 units x 4 feet = 44000 c. Direct labor rate variance $0 Neither Favorable nor Unfavorable (AH x AR) - (AH x SR) = (84000 x $10) - (84000 x $10) = $840000 - $840000 = $0 AR = $840000 / 84000 hours = $10 d. Direct labor efficiency variance $40000 Favorable (AH x SR) - (SH x SR) = (84000 x $10) - (88000 x $10) = $840000 - $880000 = $40000 SH = 11000 units x 8 hours = 88000 hoursRelated Questions
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