barley hop Incorporated manufactures custom-ordered commemorative beer stains it

Question

barley hop Incorporated manufactures custom-ordered commemorative beer stains its standard cost information follows...

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Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Standard Price Standard Unit Cost Direct materials (clay) Direct labor Variable manufacturing overhead (based on 1.60 lbs. 1.70 per lb 2.72 1.60 hrs. $16.00 per hr 25.60 1.60 hrs. S 1.20 per hr 1.92 direct labot hours) Fixed manufacturing overhead ($364,500.00 2.70 135,000.00 units) Barley Hopp had the following actual resuits last year Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 140,000 248,200 $ 397,120 185,000 $3,626,000 S 270,000 S 380,000

Explanation / Answer

1 Direct materials price variance=397120-(248200*1.7)= $24820 F Direct materials quantity variance=1.7*(248200-140000*1.6)= $41140 U Direct material spending variance=41140-24820= $16320 U 2 Direct labor rate variance=3626000-(185000*16)= $666000 U Direct labor efficiency variance=16*(185000-140000*1.6)= $624000 F Direct labor spending variance=666000-624000 = $42000 U 3 Variable overhead rate variance=270000-(185000*1.2)= $48000 U Variable overhead efficiency variance=1.2*(185000-140000*1.6)= $46800 F Variable overhead spending variance=48000-46800 = $1200 U

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