Hopkins Clothiers is a small company that manufactures tall-men’s suits. The com
ID: 2452101 • Letter: H
Question
Hopkins Clothiers is a small company that manufactures tall-men’s suits. The company has used a standard cost accounting system. In May 2014, 10,300 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 15,500 direct labor hours. All materials purchased were used.
Cost Element
Standard (per unit)
Actual
Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $57,350, and budgeted variable overhead was $40,300.
(a) Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round answers to 0 decimal places, e.g. 125.)
(b) Compute the total overhead variance.
Cost Element
Standard (per unit)
Actual
Direct materials 9 yards at $4.90 per yard $443,237 for 93,510 yards ($4.74 per yard) Direct labor 1.20 hours at $14.00 per hour $187,995 for 13,010 hours ($14.45 per hour) Overhead 1.20 hours at $6.30 per hour (fixed $3.70; variable $2.60) $48,600 fixed overhead $37,000 variable overheadExplanation / Answer
Qty Rate amount Qty Rate amount Materials 92,700.00 4.90 454,230.00 93,510.00 4.74 443,237.00 Labour 12,360.00 14.00 173,040.00 13,010.00 14.45 187,995.00 Actual output 10,300.00 Materials reqd(10300*9) 92,700.00 Labour hrs reqd(10300*1.2) 12,360.00 Materials Vaiance =Std Cost - Actual Cost Materials Vaiance =454,230 - 443,237 Materials Vaiance = 10,993 F DMPV = (SP-AP)*AQ DMPV = (4.90-4.74)93510 DMPV = 14,962 F DMQV= (SQ-AQ)SP DMQV= (92700 - 93510)4.90 DMQV= 3969 U Labour cost variance = Std Cost - Actual Cost Labour cost variance = 173040 - 187995 Labour cost variance = 14,955 U DLPV= (SR-AR)AH DLPV= (14-14.45)13010 DLPV= 5,855 U DLQV = (SH-AH)SR DLQV = (12360 - 13010)14 DLQV = 9100 U Overhead Variance = Budgeted - Actual Overhead Variance = (57350 +40,300)-(48600+37000) Overhead Variance = 12050 F
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