Erie Company manufactures a mobile fitness device called the Jogging Mate. The c

Question

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:

During August, 5,750 hours of direct labor time were needed to make 20,000 units of the Jogging Mate. The direct labor cost totaled $102,350 for the month.

Required:

1. What is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates?

2. What is the standard labor cost allowed (SH × SR) to make 20,000 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 per direct labor-hour. During August, the company incurred $21,850 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Actual Output       20,000.00 Standard Hours per unit = 18/60                 0.30 1) standard labor-hours allowed = 20000 * .30         6,000.00 2) standard labor cost allowed = 6000*17    102,000.00 3) labor spending variance = 102350 - 102000 350 U Standard Actual Particulars Hours Rate amount Hours Rate amount Labour         6,000.00    17.0000        102,000.00         5,750.00      17.80        102,350.00 Variable Overhead         6,000.00           4.00          24,000.00         5,750.00    3.8000          21,850.00 4) DLRV= (SR-AR)AH DLRV= (17 - 17.80)5750 DLRV= 4600 U DLEV = (SH-AH)SR DLEV = (6000 - 5750)17 DLEV = 4,250 F 5) VORV = (SR-AR)AH VORV = (4 - 3.8)5750 VORV = 1150 F VOEV = (SH-AH)SR VOEV = (6000 - 5750)4 VOEV = 1000 F

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.