Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:

Inputs Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Quantity or Hours 2.20 pounds 1.00 hours 1.00 hours Price Or Rate $16.70 per pound $15.90 per hour $ 9.20 per hour Cost (1) (2) $36.74 $15.90 $ 9.20 $61.84 Direct materials Direct labor Variable manufacturing overhead Total Variances Reported Standard Price Quantity or Cost. Or Rate Efficiency $734,800 $13,3407 $33,400 U $318,000 $4,200 $ 15,900 U $184,000 $ 4,900 P S u "Applied to Work in Process during the period. The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored. Required: 1. How many units were produced last period? 2. How many pounds of direct material were purchased and used in production? 3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.) 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor hour? (Round your answer to 2 decimal places.) 6. How much actual variable manufacturing overhead cost was incurred during the period? 1. Number of units produced Pounds of direct material purchased and used in production Actual cost per pound Actual direct labor-hours Actual rate per direct labor-hour Actual variable manufacturing overhead cost 5. 6.

Answer 1

1) Number of units produced = 734800/36.74 = 20000 Units

2) Material quantity variance = (Standard qty-actual qty)Standard price

-33400 = (20000*2.2*16.70-16.70X)

16.70X = 768200

X(Actual pound) = 46000 Pounds

3) Material price variance = (Standard price-actual price)actual quantity

13340 = (16.70*46000-46000X)

46000X = 754860

X(actual price) = 16.41

4) Labor efficiency variance = (Standard hour-actual hour)Standard rate

-15900 = (20000*1*15.90-15.90X)

15.90X = 318000+15900

X(Actual hour) = 21000 Hour

5) Labor rate variance = (Standard rate-actual rate)actual hour

-4200 = (15.90*21000-21000X)

21000X = 338100

X(Actual rate) = 16.10

6) Variable overhead efficiency variance = (20000-21000)*9.20 = 9200 U

Actual variable overhead = 184000-4900+9200 = 188300