Also, how do I find the.... -Standard Direct Labor Rate Per Hour -Labor Rate Var
ID: 2535005 • Letter: A
Question
Also, how do I find the....
-Standard Direct Labor Rate Per Hour
-Labor Rate Variance
-Labor Efficiency Variance
-Variable Overhead Rate Variance
-Variable Overhead Efficiency Variance
Please show your work so I can ace my exam!
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Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost S ? Direct materials Direct labor $3.00 per yard per direct $2 labor-hour Variable manufacturing overhead Total standard cost per unit Overhead is applied to production on the basis of direct labor-hours. During March, 570 backpacks were manufactured and sold Selected information relating to the month's production is given below: Variable Materials Used $ 8,550 $6,080 Direct Manufacturing Labor $6,384 Overhead $1,596 $2,812 Total standard cost allowed* Actual costs incurred Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance $570 U For the month's productionExplanation / Answer
HIGHLAND COMPANY Standard quantity/Hour Standard price/Rate Standard cost Direct Material $3 per yard Direct Labour Variable manufacturing overhead $2 per direct labour hour Material Used Direct Labour Variable manufacturing overhead Total standard cost allowed $ 8,550.00 $ 6,384.00 $ 1,596.00 Actual cost incurred $ 6,080.00 $ 2,812.00 Material price variance Material quantity variance 570(U) Labour Rate variance Labour Efficiency variance Variable overhead rate varance Variable overhead efficiency variance Actual direct labour hour 855 standard overhead rate per direct labour hour $2 Difference between standard and actual cost per backpack produced during march $.20(F) 1) Standard cost for september Production Direct Materials $ 8,550.00 Direct Labour $ 6,384.00 Variance Maufacturing Overhead $ 1,596.00 Total standard cost $ 16,530.00 Number of Backpack Produced 570 Standard cost of single backpack=($16530/570) $ 29.00 2) Standard cost of single backpack $ 29.00 Less:Favourable variance between standard and actual cost -0.02 Actual cost per backpack($29-.02) $ 28.98 3) Total standard cost of material used during september $ 8,550.00 Number of backpack produced during september 570 Standard material cost per backpack $ 15.00 Number of yards requred per backpack Standard material cost per backpack/standard material cost per yard ($15/3) Standard material cost per backpak 5 Yards per backpack 4) Standard cost of material used $ 8,550.00 Actual cost of material used $ 6,080.00 Spending Variance $ 2,470.00 (F) Material Price Variance=Total material variance-Material Quantity variance Spending Variance $ 2,470.00 (F) Quantity Variance $ 570.00 (U) Material Price Variance $ 1,900.00 (F) 5) Standard Direct labour rate per hour Standard variable manufacturing overhead for march $ 1,596.00 Standard variable manufacturing overhead rate per direct labour hour 2 Standard direct labour -hour for september($1596/2) 798 Total standard direct labour cost for september/Total direct standard hour for september=($6384/798) $ 8.00 per direct labour hour 6) Actual cost of Labour Actual cost per backup $ 28.98 Total backup produced 570 Total Actual cost of production(570*$28.98) $ 16,518.60 Less: Actual cost of material $ 6,080.00 Less: Actual variable overhead $ 2,812.00 Actual cost of direct labour($16518.60-6080-2812) $ 7,626.60 Actual Labour Hours 855 Actual Rate per direct labour hour($7626.60/855) $ 8.92 Per hour Total Labour Variance Actual Hour*Actual Rate $ 7,626.60 Standard Hour* Standard Rate $ 6,384.00 Total Labour Variance $ 1,242.60 (U) Labour Rate variance=AH*AR-AH*SR AH*AR= $ 7,626.60 AH*SR=(855*$8) $ 6,840.00 Labour Rate variance $ 786.60 (U) Labour Efficiency variance AH*SR-SH*SR AH*SR=(855*$8) $ 6,840.00 SH*SR= $ 6,384.00 Labour Efficiency variance $ 456.00 (U) 7) Total Variable maufactuing Overhead cost variance AH*AR $ 2,812.00 SH*SR $ 1,596.00 Variable manufacturing overhead variance $ 1,216.00 (U) Variable overhead rate variance= AH*AR-AH*SR AH*AR $ 2,812.00 AH*SR $ 1,710.00 $ 1,102.00 (U) Variable overhead Effciency variance AH*SR-SH*SR AH*SR $ 1,710.00 SH*SR $ 1,596.00 $ 114.00 (U) 8) Standard cost card for one backpack Standard quantity or hours Standard price or rate Standard cost Direct Material 5 Yards $ 3.00 per yard $ 15.00 Direct Labour(798/570) 1.4 Hours $ 8.00 Per Hours $ 11.20 Variable Manufacturing Overhead 1.4 Hours $ 2.00 Per Hours $ 2.80 Total Standard cost per pack $ 29.00
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