Variance Performance Analysis Cryolab Inc makes and sells a lawn fertilizer called Hypergro....
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Accounting
Variance Performance Analysis
Cryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed standard costs for one bag of Hypergro as follows:
Standard Quantity/Hours
Standard Price/Rate
Standard Cost per Bag
Direct Material
25 pounds
0.75
18.75
Direct Labor
0.25 hours
69.00
17.30
Variable overhead
0.25 hours
24.00
6.00
Total
42.05
The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company:
Production of Fastgro: 23,000 bags
Direct materials purchased: 585,000 pounds at a cost of 436,250
Direct labor worked: 5,800 hours at a cost of 397,300
Variable overhead incurred: 140,650
Inventory of direct materials on January 31: 8,000 pounds
Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet.
The variable manufacturing overhead rate variance amounts to _____________.
Indicate in your solution sheet whether it is FAVORABLE or UNFAVORABLE
For uniformity of answers, if the variance is FAVORABLE encode a minus sign before the numerical answer. Do not place spaces.
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