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Direct Materials, 2 feet at $8.45 per foot...$16.90
Direct Labor, 1.4 direct labor hours at $16 per direct labor hour..................22.40
Variable over head. 1.4 direct labor hours at $2.50 per direct labor hour.......3.50
Fixed over head, 1.4 direct labor hours at $6 per direct labor hour...8.40
Standard Cost per UnitTotal..$51.20
Company manufactured 30,000 units during year.
Total of 64,000 feet of material was purchased during the year at $8.55 per foot.
Company worked 43,500 direct labor hours, during the year at direct labor cost of $15.80 per hour.
Denominator Activity level( direct labor hours) ..35,000
Budgeted fixed over head cost$210,000
Actual variable over head cost incurred.$108,000
Actual fixed over head cost incurred$211,800
Questions :
1. Direct materials price and quantity variances:
Materials price variance = AQ (AP SP)
xx,000 feet ($x.xx per foot $8.45 per foot) = $x,x00 U
Materials quantity variance = SP (AQ SQ)
$x.xx per foot (xx,000 feet xx,000 feet*) = $xx,x00 U
Tip *30,000 units 2 feet per unit = ?? feet
2. Direct labor rate and efficiency variances:
Labor rate variance = AH (AR SR)
xx,x00 DLHs ($15.80 per DLH $xx.00 per DLH) = $x,x00 F
Labor efficiency variance = SR (AH SH)
$xx.00 per DLH (xx,500 DLHs xx,000 DLHs*) = $xx,000 U
Tip; *30,000 units 1.4 DLHs per unit = xx,000 DLHs
Answer & Explanation
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