Hawley Inc. manufactures designer iPod cases for national distribution. The stan
ID: 2391001 • Letter: H
Question
Hawley Inc. manufactures designer iPod cases for national distribution. The standard costs for the manufacture of designer iPod cases were as follows: Standard Costs Actual Costs 1,600 lbs. at $32 4,500 hrs. at $11.80 Direct1,500 lbs. at $35 materials Direct labor 4,800 hrs. at $11 Factory overhead Rates per labor hour, based on 100% of normal capacity of 5,500 labor hrs $12,300 variable cost $19,250 fixed cost Variable cost, $2.40 Fixed cost,$3.50 REQUIRED Determine the direct materials price varlance, direct materials quantity variance, and total direct materials cost varlance for the designer Pod cases 2. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance for the designer iPod cases 3. Determine the variable factory overhead controlilable variance, fixed factory overnead volume variance, and total factory overhead cost variance for the designer iPod cases.Explanation / Answer
SQ
SP
SP x SQ
AQ
AP
AP X AQ
Materials
1500
35
52500
1600
32
51200
SH
SR
SP X SR
AH
AR
AH X AR
labour
4800
11
52800
4500
11.8
53100
1.ans
Direct Material Price Variance
(SP-AP) X AQ
(35-32) X 1600
4800
F
Direct Material Quantity Variance
(SQ-AQ) X SP
(1500-1600) X 35
3500
A
Total Direct Material Cost Variance
(SP X SQ)- (AP X AQ)
52500-51200
1300
F
2.ans
Direct Labour Rate Variance
(SR-AR) X AH
(11-11.8) X 4500
3600
A
Direct labour Time Variance
(SH-AH) X SR
(4800-4500) X 11
3300
F
Total Direct Labour Cost Variance
(SR X SH)- (AR X AH)
52800-53100
300
A
.
3.ans
Variable factory overhead controllable variance
Actual factory overhead(12300+19250)
31550
Budgeted allowance based on standard hours allowed:
Fixed expenses budgeted
19250
Variable expenses
12288
31538
($ 2.4 x 5120 standard hours allowed*)
5120=actual units x standard rate allowed per unit
= 1600 x 4800/1500
Variable factory overhead controllable variance
12
F
Fixed factory overhead volume variance
Actual fixed factory overhead(A)
19250
Applied fixed overhead($3.5 x 4500 actual hours)(B)
15750
Fixed factory overhead volume variance(A-B)
3500
F
Total factory overhead cost variance
Actual factory overhead(12300+19250)(A)
31550
Total standard VFOH cost(B)
(Standard hours for actual production x Standard VFOH rate per hour)
(1600 x 4800/1500 x (2.4+5.9))
(5120 x 5.9)
30208
Total factory overhead cost variance(A-B)
1342
F
SQ
SP
SP x SQ
AQ
AP
AP X AQ
Materials
1500
35
52500
1600
32
51200
SH
SR
SP X SR
AH
AR
AH X AR
labour
4800
11
52800
4500
11.8
53100
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