1. Gilder Corporation makes a product with the following standard costs: The com

Question

1. Gilder Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in June:

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The labor rate variance for June is:

2. Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for one unit of product:

During May, Jackson purchased 92,900 pounds of direct material at a total cost of $380,890. The total factory wages for May were $647,600, 90 percent of which were for direct labor. Jackson manufactured 19,000 units of product during May using 73,000 pounds of direct material and 42,300 direct labor-hours.

The labor rate variance for May is:

3. Degregorio Corporation makes a product that uses a material with the following direct material standards:

The company produced 6,000 units in November using 19,010 kilos of the material. During the month, the company purchased 21,120 kilos of the direct material at a total cost of $101,376. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for November is:

4. Midgley Corporation makes a product whose direct labor standards are 0.8 hours per unit and $22.00 per hour. In April, the company produced 6,900 units using 5,250 direct labor-hours. The actual direct labor cost was $113,925.

The labor rate variance for April is:

5. The following data pertain to operations at Quick Incorporated:

The wait time for this operation would be:

6. The following data pertain to operations at Quick Incorporated:

The manufacturing cycle efficiency (MCE) for this operation would be:

Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 7.90 grams $10.00 per gram $79.00 Direct labor 0.15 hours $28.00 per hour $ 4.20 Variable overhead 0.15 hours $ 8.00 per hour $ 1.20

Explanation / Answer

1 Labor rate variance=Actual direct labor hours*(Standard rate-Actual rate) Actual rate=Actual direct labor cost/Actual direct labor hours=18164/670=27.11045 Labor rate variance=670*(28-27.11045)=596 Favorable 2 Labor rate variance=Actual direct labor hours*(Standard rate-Actual rate) Actual rate=Actual direct labor cost/Actual direct labor hours=(647600*0.90)/42300=13.77872 Labor rate variance=42300*(14-13.77872)=9360 Favorable 3 Material quantity variance=Standard price*(Standard quantity-Actual quantity used) Standard quantity=Actual units produced*quantity required per unit=6000*3.1=18600 Material quantity variance=5*(18600-19010)=2050 Unfavorable 4 Labor rate variance=Actual direct labor hours*(Standard rate-Actual rate) Actual rate=Actual direct labor cost/Actual direct labor hours=113925/5250=21.70 Labor rate variance=5250*(22-21.70)=1575 Favorable 5 Delivery cycle time=Wait time+Throughput time Wait time=Delivery cycle time-Throughput time Wait time=8.8-4.4=4.4 hours. 6 Manufacturing cycle efficiency=Process time/Throughput time=2.6/10.4=0.25=25%

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