West and Jones Granite Corp uses a standard cost system for its single product.

Question

West and Jones Granite Corp uses a standard cost system for its single product. The following data are available: ACTUAL for the current year: Purchase of raw materials (5,200 sq ft at $11.80) $61,360 Raw materials used 4,800 sq ft Direct Labor costs (22,000 at $13.80) $303,600 Actual variable overhead cost $64,250 Units produced 5,820 units Standards per unit of product: Raw materials 1.0 sq ft at $10.70/sq ft Direct labor 3.8 hours at $13.50/hr Variable overhead $2.75 per direct labor hour Compute the following variances: 1. material variance (price and quantity) 2. labor variance (rate and efficiency) 3. variable overhead variance (spending and efficiency)

1- Using the attached problem, compute the material price variance.

3,750 U

5,720 U

6,600 U

10,914 F

2-

Using the attached problem, compute the material quantity variance.

3,750 U

5,720 U

6,600 U

10,914 F

3-

Using the attached problem, compute the labor rate variance.

3,750 U

5,720 U

6,600 U

10,914 F

4-

Using the attached problem, compute the labor efficiency variance.

319 F

1,566 F

3,750 U

6,600 U

5-

Using the attached problem, compute the total labor variance.

319 F

1,566 F

5,034 U

6,600 U

6-

Using the attached problem, compute the variable manufacturing overhead spending variance.

319 F

1,566 F

3,431 U

3,750 U

7-

Using the attached problem, compute the variable manufacturing overhead efficiency variance.

319 F

1,566 F

3,431 U

3,750 U

8-

Using the attached problem, compute the total variable manufacturing overhead variance.

319 F

1,566 F

3,431 U

3,750 U

3,750 U

5,720 U

6,600 U

10,914 F

Explanation / Answer

1) Materials price variance (Actual rate - standard rate)*Aq purchased (11.80   - 10.70)*5200 5720 U 2) Material Qty variance (AQ used - SQ allowed)*std rate (4800      - 5820*1)*10.70 10,914 F 3) labor rate variance (Actual rate - standard rate)*actual hours (13.80-13.50)*22000 6600 U 4) labor efficiency variabce (Actual hours - standard hrs allowed)*standard rate (22000 - 5820*3.8)*13.5 1,566 F 5) total labor variance 5034 U 6) manufacturing overhead spending variance (Actual rate - standard rate)*actual hours (64250 -22000*2.75) 3750 U 7) manufacturing overhead efficiency variance (Actual hours - standard hrs allowed)*standard rate (22000 - 5820*3.8)*2.75 319 F 8) Variable manufacturing overhead variance 3431 U

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