Question

23 Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. 10 Standard Quantity or Hours per Unit of Output 7.90 liters e.50 hours e.50 hours Inputs Direct materials Direct labor Variable manufacturing overhead points Standard Price or Rate $ 7.50 per liter $26.70 per hour $ 6.40 per hour eBook The company has reported the following actual results for the product for September: Print Actual output Raw naterials purchased Actual cost of raw materials purchased Raw naterials used in production Actual direct labor-hours 10,1e0 units se, 500 1iters $615, 500 79,800 liters 4,770 hours $130, 302 $ 23,814 References Actual direct labor cost Actual variable overhead cost Required: a. Compute the materials price variance for September. b. Compute the materials quantity variance for September, c. Compute the labor rate variance for September. d. Compute the labor efficiency variance for September. e. Compute the variable overhead rate variance for September. f. Compute the variable overhead efficiency variance for September. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero variance). Input all amounts as positive values.)

Answer 1

Sol, 9) Materiaul Price Variance > =(Skandard Price X Actuad Quautity - Actuad Cost of Raw Malenial ($7.50 X 80,500) · $615,500 %3D $603.750 $615,500 $11.750 Dn favorable Sol. Cb) Materiaul Quautity Vaniance > = (5taudand Buaubity – Actual &uaubity)× Standard Price 79,800 ) x $7.50 (79,790 (10) x $7.50 $75 Unfarerable

Sol.ce) labor Rate Variance = (Actud Direet labor Hour X Staiudend Rale)-Actuad Direet labor Cast $130,302 (4,770 Hour's x $26.70 $ 127, 359 $130,302 $2,943 Dutavorable Sol.(d) labor Efficiency Varicınce > - Actual Hourx Standard Rate = (Standand Hour – (5050 4,770) x $26.70 280 x $ 26.70 $ 7,476 farorable

Sol. Ce) Variable Overhead (voH) Reite Vaniance s> Standand voH Rabe X Actuad Hour)- Actueul VOH Cost %3D = ( $ 6.40 x 4,770 0 ) - $23,814 %3D $23.814 $30,528 $6,714 favorable %3D Sol.f) Variable Overheed Efficiency Venicunce => = Steneland Hourfor Achued Outpuk -Actuad Hour)X Steudand Rate 4,770) x ( 5050 - $6,40 $1,792 favo rable

Worleingote: Standanel Buaunlity - Sol, (b) => Ackuaul Outpuk X &tondaned Quuntity Per buit 4.90 litein 10,100 Uuits X 49.,790 liter's Sol. (d) Stendand Hown's => = Actuaul Dutput X Stauolard Houis per Unit 10,100 X D. 50 houre 5,050 hour's