Castle Company produces throw blankets that are popular holiday gifts. Standard

Question

Castle Company produces throw blankets  that are popular holiday gifts.  Standard variable costs relating to a single  blanket are given below

Standard Quantity  or Hours

Standard Price or  Rate

Standard  Cost

Direct  materials

2.62 yards

$5 per yard

$?

Direct  labor

1.35 DLH

$6.80 per DLH

$?

Variable  manufacturing overhead

1.35 DLH

$2 per direct  labor-hour

$?

Total standard  cost

$?

Overhead is  applied to production on the basis of direct labor hours.  During March, 924  blankets were manufactured and sold.   

Selected  information related to the month

Standard Quantity  or Hours

Standard Price or  Rate

Standard  Cost

Direct  materials

2.62 yards

$5 per yard

$?

Direct  labor

1.35 DLH

$6.80 per DLH

$?

Variable  manufacturing overhead

1.35 DLH

$2 per direct  labor-hour

$?

Total standard  cost

$?

Castle Company produces throw blankets that are popular holiday gifts. Standard variable costs relating to a single blanket are given below Overhead is applied to production on the basis of direct labor hours. During March, 924 blankets were manufactured and sold. Selected information related to the month's production is given below: Submit an Excel document with each tab labeled by item number in good form that demonstrates the following through your calculations: What is the standard cost of a single blanket? What was the actual cost per blanket produced during March? What was the direct materials price variance for March? What was the direct labor rate variance for March? The direct labor efficiency variance? What was the variable overhead rate variance for March? The variable overhead efficiency variance?

Explanation / Answer

1.What is the standard cost of a single blanket?

standard cost of a single blanket = 13.10 + 9.18 + 2.70 = $ 24.98

2.What was the actual cost per blanket produced during March?

Actual Cost per Blanket = (11500+8408+3100)/924 = $ 24.90

3.What was the direct materials price variance for March?

Direct materials price variance = Standard Rate* Actual Quantity - Actual Material cost
= 5*2620-11500
= $1600 F

4.What was the direct labor rate variance for March? The direct labor efficiency variance?

Direct labor rate variance = Standard Rate* Actual Hour - Actual Labor cost
= 6.80*1400-8408
= $1112 F

Direct labor efficiency variance = (Standard Hour to be Used - Actual Hour)* Standard Rate
=(924*1.35 - 1400)*6.80
= $1037.68 U

5.What was the variable overhead rate variance for March? The variable overhead efficiency variance?

Variable overhead rate variance = Standard Rate* Actual Hour - Actual Variable Manufacturing Overhead cost
= 2*1400-3100
= $300 U

Variable overhead efficiency variance = (Standard Hour to be Used - Actual Hour)* Standard Rate
=(924*1.35 - 1400)*2
= $305.20 U

Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials
Standard cost = Standard Quantity or Hours * Standard Price or Rate 2.62 yards $5 per yard $ 13.10 Direct labor
Standard cost = Standard Quantity or Hours * Standard Price or Rate 1.35 DLH $6.80 per DLH $ 9.18 Variable manufacturing overhead
Standard cost = Standard Quantity or Hours * Standard Price or Rate 1.35 DLH $2 per direct labor-hour $ 2.70 Total standard cost $ 24.98 Overhead is applied to production on the basis of direct labor hours. During March, 924 blankets were manufactured and sold. Actual Cost per Blanket = (11500+8408+3100)/924 $ 24.90 Materials Used Direct Labor Variable Manufacturing Overhead Actual costs incurred $11,500.00 $ 8,408.00 $ 3,100.00 Direct materials price variance = Standard Rate* Actual Quantity - Actual Material cost
= 5*2620-11500
= $1600 F $ 1600 F Actual 2,620 yards 1400 hours Direct materials quantity variance $1,000 U Direct labor rate variance = Standard Rate* Actual Hour - Actual Labor cost
= 6.80*1400-8408
= $1112 F $ 1112 F Direct labor efficiency variance = (Standard Hour to be Used - Actual Hour)* Standard Rate
=(924*1.35 - 1400)*6.80
= $1037.68 U $ 1037.68 U Variable overhead rate variance = Standard Rate* Actual Hour - Actual Variable Manufacturing Overhead cost
= 2*1400-3100
= $300 U $ 300 U Variable overhead efficiency variance = (Standard Hour to be Used - Actual Hour)* Standard Rate
=(924*1.35 - 1400)*2
= $305.20 U $ 305.20 U

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