4.)Timo Company\'s standard materials cost per unit of output is $10 (2 pounds ×

Question

4.)Timo Company's standard materials cost per unit of output is $10 (2 pounds × $5). During July, the company purchases and uses 3,300 pounds of materials costing $16,764 in making 1,530 units of finished product. Compute the total, price, and quantity materials variances.

Total materials variance $ ___ Favorable/Unfavorable ?
Materials price variance $___ Unfavorable/Favorable ?
Materials quantity variance $ ___ Favorable/Unfavorable ?

5.)Michener Company's standard labor cost per unit of output is $28.60 (2.2 hours × $13.00 per hour). During August, the company incurs 2,420 hours of direct labor at an hourly cost of $13.65 per hour in making 1,000 units of finished product. Compute the total, price, and quantity labor variances.

Total labor variance $___ Favorable/Unfavorable ?
Labor price variance $ ___ Favorable/Unfavorable ?
Labor quantity variance $___ Unfavorable/Favorable ?

6.)In October, Harry Company reports 21,480 actual direct labor hours, and it incurs $110,340 of manufacturing overhead costs. Standard hours allowed for the work done is 20,050 hours. The predetermined overhead rate is $7 per direct labor hour. Compute the total overhead variance.
$ ________ Unfavorable/Favorable?

Explanation / Answer

Standard material cost per unit $10 Standard Quantity for 1,530 units = 1,530*2=3,060 pounds Standard Quantity 2pounds pounds [er unit Standard Rate $5 Actual Quantity 3,300 pounds Actual Price per unit = $16,764/3,300=$5.08 Material Price Variance= AQ(AP - SP) 3,300(5.08-5) 3,300(0.08) $264 Unfavorable Material Quantity Variance= SP(AQ_SQ) $5(3,300-3,060) $5(240) $1,200Unfavorable Material Price Variance = $264 Unfavorable Material Quantity Variance= $1,200 Unfavorable Total Variance = $1,464 Unfavorable Labor rate variance= AH(AR-SR) 2.42($13.65-13.00) 2.42($0.65) $1.573 per unit For 1,000 units Labor rate Variance= $1.573*1,000 $1,573Unfavorable Labor Efficiency(Quantity) Variance= SR(AH-SH) $13.00(2,420-(2.2*1,000)) $13.00(2,420-2,200) $13.00(220) $2,860Unfavorable Total Labor variance=Labor rate variance + Labor quantity variance $1,573+$2,860 $4,433 Unfavorable Variable Overhead Variance= overhead rate variance=AH(AR-SR) AH(AR-SR) 21,480($5.14 - $7) 21,480(-$1.86) $39,953Favorable Variable Overhead Efficiency Variance= SR(AH-SH) $7(21,480-20,050) $7(1,430) $10,010Unfavorable Total Overhead Variance= Overhead rate variance + Overhead Efficiency variance $39,953Favorable vorable + $10,010Unfavorable $29,943Favorable

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