Question

You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product. During your first week on the job, the vice president has been favorably impressed with your work. She has been so impressed, in fact, that yesterday she called you into her office and asked you to attend the executive committee meeting this morning for the purpose of leading a discussion on the variances reported for last period. Anxious to favorably impress the executive committee, you took the variances and supporting data home last night to study. On your way to work this morning, the papers were laying on the seat of your new, red convertible. As you were crossing a bridge on the highway, a sudden gust of wind caught the the edge of the bridge and into the stream below. You managed to retrieve only one page, which contains the following information: and blew them over раpers STANDARD COST CARD Direct materials, 6 pounds at $3 per pound.. Direct labor, 0.8 direct labor-hours at $15 per direect labor-hour. . Variable manufacturing overhead, 0.8 direct labor-hours at $3 per direct labor-hour $18.00 $12.00 $2.40 Variances Reported Total Quantity or Efficiency Standard Price Cost or Rate $6,900 F $14,550 U $1,300 F $405,000 $270,000 $54,000 $9,000 U $21,000 U $?T U Direct materials Direct labor Variable manufacturing overhead Applied to Work in Process during the period. Entry obliterated.

Answer 1

" Standard cost of raterial: (Actual oulput x Standard Quantity of material) per unit x Standard price Poron't (2) Actual output =- Standard cast of material Standard Quantity standard pruce 405000 · 22500 onily 6x 83 Material quantity variance : standard (standard Quantity - Actual Quantity) x price (22500x6 pounds - Actual Quantity) x$3 = -9000 Actual Quantity material usia = 138000 pounds

(3) Material price variance = (standard psůce - Acheia pruce) x Actual Quant е 3 - Actual psace ) х 138000 2 6400 Actual price pen pound $2.95 (4) Labows efficiency variance - s Hours a (SH AH) .GR 3 Standard Rak pen Hour C Ackso3 0655 standard (495оох О.8 - Аслов АСУ» оолша) х 1S - -9\ооо 18000 - Actual Hours worked - Cou CON\\d - - \чоо Аснаа ноч юoma 4 - 1quoo нou 6) Labour Rate variance : (standard Rate - Actual rate)x Actual Hour С 15 - Acan Rou pол но ) x 14400 Асор Жон рел ноол -$4.95 = -4SSO variable overhead expenditure variance=' ($3 - Actual oH Rale pen Howo) х 1940o 3х19uoo - Acнa) vor ob6 ой - 1300 Aca) vosйоba o(+ -$6000