Rudd Clothiers is a small company that manufactures tail-men\'s suits. The compa

Question

Rudd Clothiers is a small company that manufactures tail-men's suits. The company has used a standard cost accounting system. In May 2017, 10,200 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 16,500 direct labor hours. All materials purchased were used. Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $57,750, and budgeted variable overhead was $41, 250. Compute the total, price, and quantity variances for (1) materials and (2) labor! (Round answers to O decimal places, e.g. 125.) Total materials variance Materials price variance Materials quantity variance Total labor variance Labor price variance Labor quantity variance Compute the total overhead variance. Total overhead variance

Explanation / Answer

1.a Total materials variance = (SP *SQ) – (AP * AQ) (10200*10)

= (4.30*102000) - (4.15*102800)

= 11980

b. Materials price variance = (SP – AP) * AQ

= (4.30-4.15)*102800

= 15420

c.Materials quantity variance = SP *(SQ – AQ)

= 4.30*(102000-102800)

= -3440

2.a Total labor variance = (SR * SH) – (AR * AH) (16500*1.20)

= (14*19800)- (14.30*12840)

= 93588

b. Labor price variance = (SR – AR) * AH

=(14-14.30)*12840

= -3852

c. Labor quantity variance = SR * (SH – AH)

= 14*(19800-12840)

= 97440

3. Total Overhead Variance = Budgeted cost - Actual cost ( Fixed + variable)

= 99000- 85300

= 13700

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