ttps://newconnect.mheducat html Vitex, Inc. manufactures a popular consumer prod
ID: 2558836 • Letter: T
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ttps://newconnect.mheducat html Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: (1) standard Quantity or Standard Price or Rate Direct naterials Direet labor Variable manufacturing overhead Total standard eost per unit 2.20 pounds $16.30 per pound 1.00 hour 15.40 per hour 1.00 hours 9.50 per hour9.50 $36.30 $15.40 61.20 TotalVariances Reported Standard Price Quantity fficiency Direct materi Direct labor $617,100 11.426P 33,000 U 261,800 3.600U 15.400 u Variable manufacturing overhead $161,500 4,400 u Applied to Work in Process during the period The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored Required: 1. How many units were produced last period? 2. How many pounds of direct material were purchased and used in production? 3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.) 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.) 6. How much actual variable manufacturing overhead cost was incurred during the period?Explanation / Answer
1. No of units produced = Total standard cost/standard cost per unit = 617100/36.30 = 17000 units
2. Pounds of direct material purchased and used in production:
Material quantity variance = (standard quantity-actual quantity) standard price
-33000 = (17000*2.2-X) *16.50
-33000 = (37400-x) *16.50
-33000 = 617100-16.50X
16.50X = 6171000+33000
X= 650100/16.5
X= 39400
X (actual quantity purchased and used) = 39400 pounds
3. Actual cost per pound:
Material price variance = (standard price-actual price) actual quantity
11426 = (16.50-X) 39400
11426 = 650100-39400X
39400X= 650100-11426
39400X=638674
X = 638674/39400
X=16.21
X (actual cost per pound) = 16.21
4.) Calculate actual direct labor hours worked:
Direct labor efficiency variance = (standard hours-actual hours) standard rate
-15400 = (17000-X) 15.40
-15400 = 261800-15.40X
15.4X = 261800+15400
15.4X=277200
X=277200/15.4
X= 18000
x (actual direct labor hours) = 18000 Hours
5. Actual rate per direct labor hour:
Labor rate variance = (standard rate-actual rate) actual hours
-3600 = (15.40-X) 18000
-3600 = 277200-18000X
18000X = 277200+3600
18000X=280800
X= 15.60
X (Actual rate per direct labor hour) = 15.6 per hour
6) Actual variable overhead cost:
Variable overhead efficiency variance = (Standard hour-actual hour)* standard rate
= (17000*1-18000)*9.5
Variable overhead efficiency variance = 9500 U
Total variable overhead cost variance = 9500 U+4400 F = 5100 U
Actual variable overhead = standard overhead+ Unfavorable variance
= 161500+5100
Actual variance overhead = 166600
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