Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: (2) Standard Standard Cost (1) Standard Quantity (1) x (2) Price Inputs or Hours or Rate per 16.80 pound $15.40 per hour $. 36.96 $15.40 Direct materials Direct labor Variable manufacturing 2.20 pounds 1.00 hours 9.10 overhead 1.00 hours 9.10 per hour Total standard cost per $61.46 unit Variances Reported Price Quantity or or Rate Efficiency $33,600 U $15,400 U Total Standard Cost* $628,320 $11,426 F $261,800 $3,600 U Variable manufacturing overhead $154,700 $ 4,500 F $ Direct materials Direct labor "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.

Answer 1

1) Number of units produced = 628320/36.96 = 17000 Units

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

-33600 = (17000*2.2*16.80-16.80X)

16.80X = 628320+33600

X(actual qty) = 39400 pounds

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

11426 = (16.80*39400-39400X)

39400X = 650494

X(actual price) = 16.51

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

-15400 = (17000*1*15.40-15.40X)

15.40X = 261800+15400

X(Actual hour) = 18000 Hour

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

-3600 = (15.40*18000-18000X)

18000X = 280800

X(actual price) = 15.60

6) Variable overhead efficiency variance = (17000-18000)*9.1 = 9100 U

Actual variable overhead = 154700-4500+9100 = 159300