Helix Company produces several products in its factory, including a karate robe.

Question

Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 3,900 robes. The standard costs associated with this level of production are as follows:

  

  Variable manufacturing overhead
  (based on direct labor-hours)

$ 21.55   

    During April, the factory worked only 740 direct labor-hours and produced 4,000 robes. The following actual costs were recorded during the month:

   

  Variable manufacturing overhead

   

At standard, each robe should require 2.7 yards of material. All of the materials purchased during the month were used in production.

Compute the materials price and quantity variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar. Omit the "$" sign in your response.)

Compute the labor rate and efficiency variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations. Round your final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Compute the variable manufacturing overhead rate and efficiency variances for April: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar. Omit the "$" sign in your response.)

Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 3,900 robes. The standard costs associated with this level of production are as follows:

Explanation / Answer

Standard labour hours = 780/3900 = 0.2 hours per robe or 5 robes per hour

Yards of material per robe = 2.7

Material cost per unit (Standard) = 17.55

Cost per yard = 17.55/2.7 = 6.5 per yard

Material cost Variance = (1-2) = 1800 U

Material Price variance = (3-2) = 6000F

Material Quantity Variance = (1-3) = 7800 U

Standard labour rate per hour = 3.4/.2 = 17 per hour

labour rate variance = (3-2) = 1820 U

Labour efficiency variance = (1-3) = 1020 F

Variable oVerhead per hour = 0.6/0.2 = 3 per hour

variable overhead rate variance = (3-2) = 4580 U

variable overhead efficiency variance = (1-3) = 180 F

1 2 3 Standard Quantity * Standard Price Actual Cost Actual Quantity * Standard Price 70200 72000 78000

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