Question

Exercise 24-09 a-e (Part Level Submission) You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations. Standard Cost Card $20.00 Direct materials (5 pounds at $4 per pound) Direct labor (0.80 hours at $10) Variable overhead (0.80 hours at $3 per hour) Fixed overhead (0.80 hours at $7 per hour) 8.00 2.40 5.60 $36.00 The following is a variance report for the most recent period of operations. Variances Costs Direct materials Total Standard Cost $410,000 164,000 Price $2,095 F 3,906 U Quantity $9,000 U 22,000 U Direct labor (a) How many units were produced during the period? Number of units

Answer 1

Number of units produced = Total Standard cost/Standard cost per unit Number of units produced = $410,000/$20 Number of units produced = 20,500 units b) Direct materials quantity variance = (Actual quantity-Standard quantity) *Standard price $9,000 = (Actual quantity-(20,500*5)) *$4 Actual quantity-102,500 = $9,000/4 Actual quantity-102,500 = 2,250 Actual quantity = 102,500+2,250 Actual quantity = 104,750 pounds Raw material = 104,750 pounds Direct materials price variance = (Actual price-Standard price) *Actual quantity -$2,095 = (Actual price-$4)*104,750 Actual price - $4=-$2,095/104,750 Actual price - $4 =-$0.02 Actual price = $3.98 per lb Actual cost per pound of raw materials = $3.98 /1b

Standard hours allowed = 20,500*0.80 = 16,400 hours Direct labor efficiency variance = (Actual hours-Standard hours) "Standard rate $22,000 = (Actual hours-16,400)*$10 Actual hours - 16,400= $22,000/$10 Actual hours = 16,400 +2,200 Actual hours = 18,600 hours Actual direct labor hours = 18,600 hours e) Direct labor rate variance = (Actual rate-Standard rate) *Actual hours $3,906 = (Actual rate-$10) *18,600 Actual rate-$10 = $3,906/18,600 Actual rate-$10 = 0.21 Actual rate = $10+ 0.21 Actual rate = $10.21 Actual rate paid per direct labor hour = $10.21 /hr