Solution
Standard labor hours Allowed | 8685 | |
Standard labor cost allowed | $ 50,373.00 | |
Labor Spending Variance | $ 2,743.00 | Unfavourable-U |
Labor rate Variance | $ 1,897.00 | Favourable-F |
Labor Efficiency variance | $ 4,640.00 | Unfavourable-U |
Variable overhead Rate Variance | $ 2,845.50 | Unfavourable-U |
Variable overhead Efficiency Variance | $ 3,760.00 | Unfavourable-U |
Working
Standard DATA for | 19300 | Units | |
Quantity (SQ) | Rate (SR) | Standard Cost | |
[A] | [B] | [A x B] | |
Direct labor | ( 0.45 Hour x 19300 Units)=8685 Hour | $ 5.80 | $ 50,373.00 |
Variable Overhead | ( 0.45 Hour x 19300 Units)=8685 Hour | $ 4.70 | $ 40,819.50 |
.
Actual DATA for | 19300 | Units | |
Quantity (AQ) | Rate (AR) | Actual Cost | |
Direct labor | 9485 | $ 5.60 | $ 53,116.00 |
Variable Overhead | 9485 | $ 5.00 | $ 47,425.00 |
.
Labor Rate Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Labor Hours |
( | $ 5.80 | - | $ 5.60 | ) | x | 9485 |
1897 | ||||||
Variance | $ 1,897.00 | Favourable-F | ||||
Labour Efficiency Variance | ||||||
( | Standard Hours | - | Actual Hours | ) | x | Standard Rate |
( | 8685 | - | 9485 | ) | x | $ 5.80 |
-4640 | ||||||
Variance | $ 4,640.00 | Unfavourable-U | ||||
Labor Spending Variance | ||||||
( | Standard Cost | - | Actual Cost | ) | ||
( | $ 50,373.00 | - | $ 53,116.00 | ) | ||
-2743 | ||||||
Variance | $ 2,743.00 | Unfavourable-U | ||||
Variable Overhead Rate Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Labor Hours |
( | $ 4.70 | - | $ 5.00 | ) | x | 9485 |
$ (2,845.50) | ||||||
Variance | $ 2,845.50 | Unfavourable-U | ||||
Variable Overhead Efficiency Variance | ||||||
( | Standard Hours | - | Actual Hours | ) | x | Standard Rate |
( | 8685 | - | 9485 | ) | x | $ 4.70 |
$ (3,760.00) | ||||||
Variance | $ 3,760.00 | Unfavourable-U |
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to...
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