Epley Corporation makes a product with the following standard costs: n July the

Question

Epley Corporation makes a product with the following standard costs:

n July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours. During the month, the company purchased 13,000 pounds of the direct material at a cost of $35,100. The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The labor rate variance for July is:

Direct materials. Direct labor. Variable overhead.. Standard Quantity or Hours 3.5 pounds 0.8 hours 0.8 hours Standard Price or Rate $3.00 per pound $19.00 per hour $8.00 per hour

Explanation / Answer

Queston is asking for labour rate variance so I am answering that Only. But I have prepared complete table. So if you want to compute other variance you can put your answer in th formula from the table Particulars Standard Actual Qty Rate amount Qty Rate amount Materials      11,550.00           3.00          34,650.00      13,000.00            2.70          35,100.00 Labour        2,640.00    19.0000          50,160.00        2,760.00          18.70          51,612.00 Overhead        2,640.00           8.00          21,120.00        2,760.00            7.30          20,148.00 Actual output        3,300.00 Materials reqd(3300*3.5)      11,550.00 Labour hrs reqd(3300*.8)        2,640.00 Labour Rate Variance DLRV= (SR-AR)AH DLRV= (19-18.70)2760 DLRV= 828 F DMPV = (SP-AP)*AQ DMQV= (SQ-AQ)SP { On the basis of Qty used) DLEV = (SH-AH)SR VORV = (SR-AR)AH VOEV = (SH-AH)SR

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