What is the direct materials quantity variance? a. $3,600 favorable b. $1,240 fa

Question

What is the direct materials quantity variance? a. $3,600 favorable b. $1,240 favorable c. $3,600 favorable d. $1,240 unfavorable 5. 6. The following data relate to direct labor costs for the current period Standard costs Actual costs 9,000 hours at $5.50 8,500 hours at $5.75 What is the direct labor rate variance? a. $2,250.00 unfavorable b. $2,125.00 unfavorable c. $2,250.00 favorable d. $2,125.00 favorable 7. The following data relate to direct labor costs for the current period: Standard costs Actual costs 36,000 hours at $22.00 35,000 hours at $23.00 What is the direct labor time variance? a. $36,000 unfavorable b. $35,000 unfavorable c. $23,000 favorable d. $22,000 favorable (Refer to the information below for Questions 8 and 9) The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows: Standard: 25,000 hours at $10 $250,000 Variable factory overhead Fixed factory overhead $202,500 60,000 Actual: 8. Wha is the amount of the factory overhead volume variance? a. $12,500 favorable b. $10,000 unfavorable c. $12,500 unfavorable d. $10,000 favorable

Explanation / Answer

Labor Rate Variance=Actual Hours(Actual Rate-Standard Rate) Ans (6) Actual Hours 8500 Actual Rate $               5.75 Standard Rate $               5.50 Ans (b) LaborRate Variance=8500($5.75-$5.5) $      2,125.00 (Unfavourable) Ans (7) Direct Labor Time Variance=(Actual Hours*Standard Rate)-Standard Cost Actual Hours 35000 Standard Hours 36000 Standard Rate $            22.00 Standard Cost=(36000*$22) $ 792,000.00 ANS (d) Direct Labor Time Variance=35000*$22-$792000 $ (22,000.00) (favourable) Ans (8) Actual Overhead $ 262,500.00 Units Produced during the period 5000 Standard Hours allowed 25000 Standard hours for one unit=(25000/5000) 5 Standard factory Overhead rate Variable $               8.00 Fixed $               2.00 Normal Capacity in labor hours 30000 Budgeted allowance based on standard hours allowed Fixed Expenses budgeted=(30000*$2) $    60,000.00 Variable Overhead(25000*$8) $ 200,000.00 Budgeted allowance based on standard hours allowed=($60000+$200000) $ 260,000.00 Overhead charged to Production=(Standard Hours allowed *Standard Rate)=(25000*$10) $ 250,000.00 Ans (b) Overhaed Volume Variance=(Budgeted allowance based on standard hours allowed-Overhead charged to production)=($260000-$250000) $    10,000.00 (Unfavourable)

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