Question

please show your work

oblem 3 (Textbook Reference: 8-6-Compute materials and labor variances Based on a standard volume Tahoe Company consists of: Standard volume of 96,000 units per month, the standard cost of the product manufactured by $ $ Direct materials (0.25 pounds x $8 per pound) Direct labor (0.5 hours x $7.60 per hour) Variable manufacturing overhead per unit Fixed manufacturing overhead ($144,000 in total) 2.00 3.80 2.50 1.50 9.80 23.200 pounds of materials was purchased at $8.40 per pound. During May, 98,400 units were produced with the following costs: Direct materiak used (24,000 pounds x $8.40 per pound) $ 201,600 Direct labor (50,000 hours x $7.80 per hour) $ 390,000 Variable manufacturing overhead $ 249,000 Fixed manufacturing overhead $ 145.000 Required: (circle For U to indicate whether the variance is favorable or unfavorable) For U a. Compute the materials price variance: - Foru b. Compute the materials quantity usage variance: For U c. Compute the total materials variance: 10,000 _Foru d. Compute the labor rate variance: For U e. Compute the labor efficiency variance: _ Foru f. Compute the total labor variance: ***You must show your work to receive credit *** a) 25, 20ux (8.40-8.00): $10,0800 e) $7.60x650,000-198, 4ux.5l bl 88.00x 124,000 (98, you x, 25). 6,080 u 4,80 F a 50,000x 17.80-7.60) 10,000 U

Answer 1

a. Material price Variante Formula i standard - Actual. Actual Quanting Rate Rate namna (8- 8.4) 24000 B enz - 96000 (U) . Material Quantity Variance fomula & Standard Quantica Actual Quantity Standard Rate Standard Quantity for cutial output Material used pey unit x Actual units produced - 0.2 pounds bg Cat for 1 unit Actual unite = 18400 produced 0.2 x 98400 - 19680 Material quantity Vauianu - (19680-24000) 8 3 3456086)

e Material lest Vauianie Fomula: Standard cost - Actual cost. Standard coste Standard Rate x sto Quantity too for actual output 8 X 19690 Co.15744 - Actual lost = Actual Rate & Actual Quantity 2.4 - X 2400D 201600 — (B) Material cost Variance a A B s 44160 (0) Material cost Varianie 4416010) Material - price Variance 9600 U) Material Quality Variane 34560 (U). d. Labour Rate Variance. Formula (standard Rate - Actual Rate) Actual hour 3 (706- 78) 50,000 € 10,000 (U).