Check my work View previous attempt 2 Exercise 10-4 Direct Labor and Variable Ma

Question

Check my work View previous attempt 2 Exercise 10-4 Direct Labor and Variable Manufacturing Overhead Variances [LO10-2, LO10-3] 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: points Standard Standard Rate Standard Hours 27 minutes Cost $2.61 per Hour eBook Hint Print $5.80 toan asr During August, 9,495 hours of direct labor time were needed to make 19,700 units of the Jogging Mate. The direct labor cost totaled References$53,172 for the month Required 1. What is the standard labor-hours allowed (SH) to makes 19,700 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 19,700 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $49,374 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.

Explanation / Answer

Actual Hours Actual Rate Actual Cost Labor Costs 9495 5.60 53172 Standard Hour Standard Rate Standard Cost Labor Costs 27 Min 5.80 2.61 In Hours Labor Costs 0.45 5.80 2.61 (27/60) Actual Units 19700 1 Standard Hours PU 0.45 Actual Units 19700 Standard Hours Total 8865 (19700*0.45) 2 Standard Hours Total 8865 Standard Rate 5.80 Standard Labor Cost 51417 3 Labor Spending Variance: Standard Labor Cost 51417 Actual Labor Cost 53172 Unfavorable Variance -1755 4 Labor Rate Variance: (Standard Rate-Actual Rate)*Actual Hours (5.80-5.60)*9495 1899 Favourable Labor Eff Variance: (Standard Hour-Actual Hour)*Stand Price (8865-9495)*5.80 -3654 Unfavourable 5 Standard Hours Total 8865 Budgeted Variable MOH Rate 4.50 Standard VMOH Cost 39892.5 Actual Hours 9495 Actual Rate 5.20 (49374/9495) Actual VMOH Cost 49374 VMOH Rate Variance: (Standard Rate-Actual Rate)*Actual Hours (4.50-5.20)*9495 -6646.5 Unfavourable VMOH Eff Variance: (Standard Hour-Actual Hour)*Stand Price (8865-9495)*4.5 -2835 Unfavourable

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