Vitex, Inc. manufactures a popular consumer product and it has provided the foll
ID: 2403063 • Letter: V
Question
Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:
*Applied to Work in Process during the period.
The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.
Required:
1. How many units were produced last period?
2. How many pounds of direct material were purchased and used in production?
3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.)
4. How many actual direct labor-hours were worked during the period?
5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)
6. How much actual variable manufacturing overhead cost was incurred during the period?
Inputs (1) Standard Quantity or Hours (2)Standard
Price
or Rate Standard
Cost
(1) × (2) Direct materials 2.00 pounds $ 16.80 per pound $ 33.60 Direct labor 1.00 hours $ 15.70 per hour $ 15.70 Variable manufacturing overhead 1.00 hours $ 9.60 per hour $ 9.60 Total standard cost per unit $ 58.90
Explanation / Answer
Req 1: Total Material Standard cost: $ 537600 Std Material cost per unit of output: $33.60 Actual output: 537600 /33.60 = 16000 units Req 2: Std material qty alowed: 16000*2=32000 Std material price per unit: 16.80 per unit Material Qty variance: 33600 Unfav Material Qty variance: Std price (Std qty-Actual Qty) (33600) = 16.80 (32000-Actual Qty) Actual qty used or purchased: 34000 units Req 3: Material Price variance: 9860 F Material price variance: Actual Qty used (Std price-Actual price) 9860 = 34000 (16.80- actual price) Actual Price: $ 16.51 per unit Req 4: Std labour hours ffor actual output: 16000*1= 16000 hours Labour efficiency variance: 15700 U Std rate per hour: 15.70 per hour Labour efficiency variance: Std rate per hour (Std hours-Actual hours) ( 15700) = 15.70 (16000-Actual hours) Actual hours: 17000 houors Req 5: Labor rate variance: 3400 U Labor rate variance: Actual hours (Std rate-Actual rate) (3400) = 17000 (15.70- Actual rate) Actual rate per hour: $ 15.90 per hour Req 6: Variable rate variance: 4200 F Std variable OH rate per hour: $ 9.60 per hour Variable rate variance: Actual hours *Std rate-Actual variable OH incurred 4200 =17000*9.60 - Actual variable OH Actual variable OH incurred: 159000
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