Kropf Inc. has provided the following data concerning one of the products in its
ID: 2519470 • Letter: K
Question
Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours Standard Quantity or Inputs Direct materials Direct labor Variable manufacturing overhead Hours per Unit of Output Standard Price or Rat 7.4 0.70 7.00 per liter 21.70 per hour liters hours 0.70 hours 5.90 per hour The company has reported the following actual results for the product for September 9.600units 75,000liters ctual output Raw materials purchased Actual cost of raw materials purchased| 562,500 Raw materials used in production Actual direct labor-hours Actual direct labor cost 71,050liters 6,410hour 142,30 34,61 ctual variable overhead cost Required: a. Compute the materials price variance for September. b. Compute the materials quantity variance for September. c. Compute the labor rate variance for September. d. Compute the labor efficiency variance for September e. Compute the variable overhead rate variance for September. f. Compute the variable overhead efficiency variance for September.Explanation / Answer
a) Material price variance = (7*75000-562500) = 37500 U
b) Material quantity variance = (9600*7.4-71050)*7 = 70 U
c) Labour rate variance = (21.70*6410-142302) = 3205 U
d) Labour efficiency variance = (9600*.70-6410)*21.70 = 6727 F
e) Variable overhead rate variance = (5.9*6410-34614) = 3205 F
f) Variable overhead efficiency variance = (9600*.70-6410)*5.9 = 1829 F
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