The Koski Company has established standards as follows: Direct material 3.20 pou

Question

The Koski Company has established standards as follows:

Direct material 3.20 pounds @ $5.70/pound = $18.24 per unit
Direct labor 2.10 hours @ $9.70/hour = $20.37 per unit
Variable overhead 2.10 hours @ $6.70/hour = $14.07 per unit

Actual production figures for the past year were as follows:

Units produced 670
Direct materials used 2,660 pounds
Direct materials purchased (4,700 pounds) $27,260
Direct labor cost (1,120 hours) $11,088
Variable overhead cost incurred $7,392


The materials price variance is (Do not round intermediate calculations.):

$470 U
$214 U
$266 U
$15,039 U


The materials quantity variance is: (Round your answer to nearest dollar amount.)

$2,993 U
$2,941 U
$2,993 F
$12,221 U


The labor rate variance is (Do not round intermediate calculations.):

$2,560 U
$224 U
$2,560 F
$224 F


The labor efficiency variance is: (Round your answer to nearest dollar amount.)

$2,560 U
$2,784 F
$2,784 U
$2,560 F

The variable overhead rate variance is (Do not round intermediate calculations.):

$2,035 F
$112 U
$2,035 U
$112 F

The variable overhead efficiency variance is: (Round your answer to nearest dollar amount.)

$2,035 F
$2,035 U
$1,923 F
$1,923 U

Explanation / Answer

Materials price variance = AQ purchased(AP-SP) = 4700(27,260/4700 - 5.70) = 4700(5.80 - 5.70) = 470 unfavorable

Answer: $470 U

Materials quantity variance = SP(AQ used -SQ) = 5.70(2660 - 3.2*670) = 5.70(2660 - 2144) = 2941.2 unfavorable

Answer: $2941 U

Labor rate variance = AH(AR-SR) = 1120(11088/1120 - 9.70) = 1120(9.90 - 9.70) = 224 unfavorable

Answer: $224 U

Labor efficiency variance = SR(AH-SH) = 9.70(1120 - 2.1*670) = 9.70(1120 - 1407) = -2783.9 favorable

Answer: $2784 F

Variable overhead rate variance = actual – (AHXSVR) = 7392 - 1120*6.70 = -112 favorable

Answr: $112 F

Variable overhead efficiency variance = SVR(AH-SH) = 6.70(1120 - 670*2.10) = 6.70(1120 - 1407) = -1922.9 favorable

Answer: $1923 F

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