Fortes nc has provided the following data concerning one of the products in its

Question

Fortes nc has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours Quantity or per Unit of Price or Rate Inputs Direct materials Direct labor Varlable sanufacturing overhead 8.5 ounces 9.6 hours 9.6 hours s 6.60 per ounce $24.88 per hour 5 4.99 per hour 3.35 points The compeny has reported the following actual results for the product for Apri 1272 Actuel output Rau nateriais purchased Actual cost of rau materials purchased Rau neterials used in production Actusl direct 1abor hours Actual direct labor cost Actuai varlable overhead cost 6,189 units 55,e50 ounces 383,818 51,868 ounces ,360 hours 586,810 s 15,717 Required: s Compute the materia's price variance for Apri b. Compute the materia's quanitity variance for April c. Compute the labor rate variance for Aprl d Compute the labor efficiency variance for Apn e Compute the varlable overnead rate varlance for Aprill t Compute the variable overhead efficiency veriance for

Explanation / Answer

Fortes Inc.

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a. Materials price variance $60320 Favorable (AQ x AR) - (AQ x SR) = $303010 - (55050 x $6.60) = $303010 - $363330 = $60320 b. Materials quantity variance $66 Unfavorable (AQ x SR) - (SQ x SR) = (51860 x $6.60) - (51850 x $6.60) = $342276 - $342210 = $66 SQ = 6100 units x 8.50 ounces = 51850 ounces c. Labor rate variance $3482 Unfavorable (AH x AR) - (AH x SR) = $86810 - (3360 x $24.80) = $86810 - $83328 = $3482 d. Labor efficiency variance $7440 Favorable (AH x SR) - (SH x SR) = (3360 x $24.80) - (3660 x $24.80) = $83328 - $90768 = $7440 SH = 6100 units x 0.60 hours = 3660 hours e. Variable overhead rate variance $747 Favorable (AH x AR) - (AH x SR) = $15717 - (3360 x $4.90) = $15717 - $16464 = $747 f. Variable overhead efficiency variance $1470 Favorable (AH x SR) - (SH x SR) = (3360 x $4.90) - (3660 x $4.90) = $16464 - $17934 = $1470

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