4 Erie Company manufactures a moblie fitness device called the Jogging Mate. The

Question

4 Erie Company manufactures a moblie 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 Standard Standard Rate Standard per Cost $2.70 30 minutes $5.40 045123 During August, 10,090 hours of direct labor time were needed to make 19,100 units of the Jogging Mate. The direct labor cost totaled $53,477 for the month. Required 1. What is the standard labor-hours allowed (SH) to makes 19,100 Jogging Mates? 2 What is the standard labor cost allowed (SH SR) to make 19,100 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 $410 per direct labor-hour. During August, the company incurred $50.450 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month (For requirements 3 through 5, indicate the effect of each variance by selecting "Fl for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero veriance). Input all amounts as positive values. Do not round intermediate calculations.) 1 Standard labor-hours allowed ed

Explanation / Answer

Req 1 Std hourrs per unit of output: 0.50 hour per unit Actual output: 19100 units Std labour hours allowed: 19100 units*0.50 hour: 9550 units Rreq 2: Std rate per hour: $ 5.40 per hour Std labour ccost for actual output: 9550 hours*5.40 = $ 51570 Req 3: Actual labour cost incurred: $ 53477 Labour Spending variance: Std labour ccost for actual output-Actual labour cost 51570 - 53477 = $ 1907 unfav Req 4: Actual rate per hour (53477/10090): 5.30 per hour Actual labour hours: 10090 hours labour rate variance: Actual hours (Std rate-Actual rate) 10090 (5.40-5.30)= 1009 Fav labour efficiency variance: Std rate (Std hour- Actual hours) 5.40 (9550-10090)= $ 2916 Unfav Req 5: Std Vvariable OH rate per hour: $ 4.10 per hour Actual Variable cost incurred: $ 50450 Actual OH rate per hour: 50450 /10090= $ 5.00 per hour Variable OH rate variance: Actual hours (Std OH rate-Actual rate) 10090 (4.10-5.00)= $ 9081 Unfav Variable OH efficiency Variance: Std rate (Std hours-Actual Hours) 4.10 (9550-10090)= $ 2214 Unfav

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