rk, Ch 10 Erie Company manufactures a mobile fitness device called the Jogging M

Question

rk, Ch 10 Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: 3e minutes $6.48 3.20 During August, 10150 hours $62.930 for the month. of direct labor time were needed to make 19.200 units of the Jogging Mate. The direct labor cost totaled Required 1. What is the standard labor-hours allowed (SH) to makes 19.200 Jogging Mates? 2. What is the standard labor cost allowed (SH SR) to make 19,200 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate varlance and the labor efficiency variance? The budgeted variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $54.810 in For requirements 3 through 5, indicete the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None for no effect (i.e., zero variance). Input all amounts as positive volues. Do not round intermediate calculations.)

Explanation / Answer

a) Standard labour hour allowed =19200*30/60 = 9600 hour

b) Standard labour cost allowed = 9600*6.4 =61440

c) Labour cost variance = 61440-62930 = 1490 U

d) Labour rate variance = (6.4*10150-62930) =   2030 F

Labour efficiency variance = (9600-10150)*6.4 = 3520 U

e) Variable overhead rate variance = (4.5*10150-54810) = 9135 U

Variable overhead efficiency variance = (9600-10150)*4.5 = 2475 U

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