Question

Se The following data reflect the current month's activity for Vickers Corporation. Actual total direct labor Actual hours worked Standard labor-hours allowed for actual output (flexible budget) Direct labor price variance Actual variable overhead Standard variable overhead rate per standard direct labor-hour $642,400 36,500 35,200 $ 14,600 F $159,200 $ 4.40 Variable overhead is applied based on standard direct labor-hours allowed. Required: Compute the labor and variable overhead price and efficiency variances, (Indicate the effect of each favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Direct labor: Price variance Efficiency variance Variable overhead: Price variance Efficiency variance - Next > 77 10 <

Answer 1

F $ 14,600.00 $ 23,400.00 Direct Labour : Price Variance Efficiency Variance Variable Overhead : Price Variance Efficiency Variance F $ $ 1,400.00 5,720.00 Working : Direct Labour : Actual Direct Labour Costs Actual Inputs at standard Price - $642400+$14600 Price Variance = $657000-$642400 $642,400.00 $657,000.00 $ 14,600.00 Variable Overhead: Actual Costs Actual inputs at standard price = 36500*4.4 Flexible Budget - 35200 * $4.4 $159,200.00 $160,600.00 $154,880.00 F Price variance = Actual Hours * Standard rate- Actual hours * Actual Rate 14600 = 36500 hours * standard rate - 642400 standard rate = 657000 / 36500 Price variance = 160600-159200 Efficiency variance = 154880-160600 $ $ 1,400.00 5,720.00 U S 18.00 Flexible Budget (standard inputs allowerd for output) = $18 * 35200 $633,600.00 Efficiency variance = $633600 - $ 657000 $ 23,400.00 U