I am assigned a homework problem to do, but I am completely lost...I could reall

Question

I am assigned a homework problem to do, but I am completely lost...I could really use some help please! On the whole thing..

Here it is:

Bronfenbrenner Co. uses a standard cost system for its single product in which variable overhead is applied on the basis of direct labor hours. The following information is given:

Standard costs per unit:

Raw materials (1.5 grams at $16.00 per gram).......................... $24.00

Direct labor (0.75 hours at $8 per hour)........................................ $6.00

Variable overhead (0.75 hours at $3 per hour)............................ $2.25

Actual experience for current year:

Units produced.................................................................................. 22,400 units

Purchases of raw materials (21,000 grams at $17 per gram). $357,000

Raw materials used......................................................................... 33,400 grams

Direct labor (16,750 hours at $8 per hour)................................... $134,000

Variable overhead cost incurred..................................................... $48,575

Compute the following variances:

a. Direct materials price variance

b. Direct materials quantity variance

c. Direct labor rate variance

d. Direct labor efficiency variance

e. Variable overhead spending variance

f. Variable overhead efficiency variance

Explanation / Answer

. Raw Materials:

Price variance = AQ(AP ? SP) (based on quantity purchased)

= 21,000 ($17 ? $16) = $21,000 U

Quantity variance = SP(AQ ? SQ) (based on quantity used)

= $16(33,400 ? *33,600) = $3,200 F

* SQ = 22,400 units at 1.5 grams per unit = 33,600

c. & d. Direct labor:

Rate variance = AH(AR ? SR) = 16,750($8 ? $8) = 0

Efficiency variance = SR(AH ? SH) = $8(16,750 ? *16,800) = $400 F

* SH = 22,400 units at 0.75 hours per unit = 16,800

e. & f. Variable overhead:

Spending variance = AH(AR ? SR) = 16,750(*$2.90 ? $3) = $1,675 F

* AR = $48,575 / 16,750 hours = $2.90

Efficiency variance = SR(AH ? SH) = $3(16,750 ? *16,800) = $150 F

* SH = 22,400 units at 0.75 hours per unit = 16,800

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.