D) $10,535 Use the following information for questions 46-51 Tharalds on Corpora

Question

D) $10,535 Use the following information for questions 46-51 Tharalds on Corporation makes a product with the following standard costs Standard Quantity orStandard Price or Hours 6.5 ounces 0.2 hours 0.2 hours Rate Direct labor Variable overhead... $2.00 per ounce $23.00 per hour S6.00 per hour The company reported the following results con y reported the following results concerning this product in June Originally budgeted output2,700 units Actual output..2,800 units Raw materials used in production.19,380 ounces Purchases of raw material. 21,400 ounces 500 hours Actual cost of raw materials purchases.. Actual direct labor cost. Actual variable overhead cost .. $40,660 S12,050 costS3,100 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

Explanation / Answer

46). Material Quantity Variance :-

= Standerd Price * (Standerd Quantity - Actual Quantity)

= $2 * ((2800*6.5) - 19380)

= $2 * (-1180)

= 2360 U

47). Material Price Variance :-

= Actual Quantity * (Standerd Price - Actual Price)

= 21400 * ($2 - ($40660/21400))

= $2140 F

48). Labor Efficiency Variance ;-

= Standerd Rate * (Standerd Hours - Actual Hours)

= $23 * ((2800*0.2) - 500)

= $23 * (560 - 500)

= $1380 F

49) Labor Rate Variance :-

= AH * (SR - AR)

= 500 * ($23 - ($12050/500)

= 500 *(- $1.1)

= $550 U

50). Overhead Efficiancy Variance :-

= SR * (SH - AH)

= $6 * ((2800*0.2) - 500)

= $6 * 60

= $360 F

51). Overhead Rate Variance :-

= AH * (SR - AR)

= 500 * ($6 - ($3100 / 500)

= 500 * ($6 - $6.2)

= 500 * (-0.2)

= 100 U

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