IV: Standard Cost (22 points) Erie Sports Corporation makes a product with the f

Question

IV: Standard Cost (22 points) Erie Sports Corporation makes a product with the following standard costs: Direct materials: 5 pounds per unit of product and $3.5 per pound of material Direct labor: 2 hours per unit of product and $12 per hour Variable overhead: $10 per direct labor hour The company reported the following results concerning this product last month: Units of products produced: 5,400 units Direct materials: 30,100 pounds were purchased and used, and price was S3.7 per pound Direct labor: 11,120 hours were used, and the total cost was $139,600 Variable overhead: total cost was $107,864 a. What was the materials price variance? Ans: S favorable unfavorable (Cirele one) b. What was the materials quantity variance? favorable unfavorable (Circle one) Ans: $ c. What was the variable overhead rate variance? Ans: S favorable unfavorable (Circle one) d What was the variable overhead fficiene varn Ans: $ favorable unfavorable (Circle one)

Explanation / Answer

a)

Material price variance = Actual quantity×Standard cost per unit-Actual cost

= 30,100×$3.50-30,100×$3.70

= $6,020 Unfavorable

b)

Material quantity variance:

= Standard quantity×Standard cost per unit- Actual quantity×Standard cost per unit

= 5,400×5×$3.50-30,100×$3.50

= $10,850 unfavorable

c)

Variable overhead rate variance:

= Actual hours worked×(Actual overhead rate-Standard overhead rate)

= 11,120×($107,864/11,120-$10)

= $3,336 unfavorable

d)

Variable overhead efficiency variance:

= Standard overhead rate×(Actual hours-Standard hours)

= $10×(11,120-5,400×2)

= $3,200 favorable

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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