(1) Standard Quantity or standard Price Standard Cost Hours Direct labor Variabl
ID: 2403090 • Letter: #
Question
(1) Standard Quantity or standard Price Standard Cost Hours Direct labor Variable manufacturing overhead Total standard cost per unit 2.10 pounds $16.30 per pound 1.00 hours $16.00 per hour 1.00 hours 9.40 per hour9.40 $34.23 $16.00 $59.63 rted Tot Standard Price Quantity or riances Cost+or Rate Efficiency $581,910 $10,933F $32,600 U $272,000 3,600U $16,000 U $159,800 4,300 F 2 u Direct materials Direct labor Variable manufacturing overhead 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 purch 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?Explanation / Answer
1.
No. of units produced =Total standard cost/Standard cost per unit = $ 581,910/$ 34.23 = 17,000 units
2.
Standard quantity for actual production = Qty. produced x unit standard cost
= 17,000 x 2.1 = 35,700
Direct material quantity variance = (Actual quantity - Standard quantity) x Standard price per pound
$ 32,600 = (Actual quantity – 35,700) x $ 16.30
Actual quantity – 35,700 = $ 32,600/$ 16.30
= 2,000 + 35,700 = 37,700
3.
Direct material price variance = (Actual price – Standard price) x Actual quantity
-$ 10,933 = (Actual price – $ 16.30) x 37,700
Actual price – $ 16.30 = -$ 10,933/37,700
Actual price = $ 16.30 - $ 0.29 = $ 16.01
4.
Actual direct-labor hour worked = Total standard labor cost/ standard labor rate
= $ 272,000 /$ 16 = 17,000
5.
Direct labor rate Variance = (Actual rate – Standard rate) x Actual direct labor hours
$ 3,600 = (Actual rate – $ 16) x 17,000
(Actual rate – $ 16) = $ 3,600 /17,000
Actual rate = $ 16 + $ 0.211764706 = $ 16.21176471 or $ 16.21
6.
Variable overhead rate variance = (Actual rate - Standard rate) x Actual unit of allocation base
-$ 4,300 = (Actual rate - $ 9.40) x 17,000
(Actual rate - $ 9.40) = - $ 4,300/17,000
Actual rate = $ 9.4 - 0.252941 = $ 9.147059 or $ 9.15
Actual variable manufacturing overhead cost = Actual variable rate x actual labor hours
= $ 9.147059 x 17,000
= $ 155,500
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