Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: Sta (2) Standard Price or Rate (1) Standard Quantity or Hours Standard Cost (1) x (2) Inputs $ per $38.64 2.30 pounds 1.00 hours 16.80 pound $15.50 per hour $15.50 Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 1.00 hours 9.40 per hour $ 9.40 $63.54 Total Variances Reported Standard Price Quantity or Cost* or Rate Efficiency Direct materials $656,880 $11,919 F $33,600 U Direct labor $263,500 $ 3,600 U $15,500 U Variable manufacturing overhead $159,800 $ 4,100 F $ ? 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?

Answer 1

1) No of units produced = 656880/38.64 = 17000 Units

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

-33600 = (17000*2.3*16.8-16.80X)

16.80X = 656880+33600

X(actual quantity purchased = 41100

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

11919 = (16.80*41100-41100X)

41100X = 690480-11919

X(actual cost per pound) = 16.51

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

-15500 = (17000*15.50-15.50X)

15.50X = 279000

X(actual hour) = 18000 Hour

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

-3600 = (15.50*18000-18000X)

18000X = 282600

X(actual rate) = 15.70

5) Variable overhead efficiency variance = (17000-18000)*9.4 = 9400 U

Actual variable overhead = 159800+9400-4100 = 165100