Question

PA9-1 Calculating Direct Material, Direct Labor, Variable Overhead Variances (LO 9-3, 94, 9-5) Barley Hopp, Inc., manufactures custom ordered commemorative beer steins. Its standard cost information follows: Standard Pro Standard Unit Cost Sundard Quantity 170 1.70 hrs 0 5 Direct materials clay Direct labor Vare manufacturing overhead based on direct labor hours) Fixed manufacturing overhead 5350 50000 155 000 00 units) 180 perb 1300 perhe 10 perhe 22 10 2.30 Barley Hopp had the following actual results last year Number of units produced and sold Number of pounds of clayed Cowy Number of our worked Owocheco Vanable the cost Food overhead cost 100 2200 S567 500 2050 53587500 $ 310.000 $ 350 000 for favor Required 1. Calculate the direct materials price, quantity, and total spending variances for Barley Hope. Do not round your intermediate calculations, Indicate the effect of each wariance by selecting unfavorable) Dred Materia Price Varance De Matters Quality Vrance Dred Matoran spending Variance

Answer 1

Solution: Material Variances ! Standard sty per clay = 1.70 lbs. Standard Rate per $0.181.7 - $3.06 cloy a Standard Rate per GSP) $1.8 $S47,580 Beata Actual: Clay Qty na $ 160000 RAID 286200 658 - Cost of clay = Actud Ity per cloy = 286200 160000= 1.78875 Actel Rate per lbst STAP 547580 = $ 1.9133 2862w W 1 D.mat 1 Price voriance = (SP-AP) x Ag . (1.8 -1.9133 x 286200 = $(3239-73-) $(32,426.46) LO) D. Mat Qtyvariance (59-AD) xse (160000X 1-7) - 2862004 * 1.8 (272000 - 286200) if - $(25560) D. mat Spending variance = ft. Cost afc. Cost! T U300SP) - FAQXAP) 3*4160002X1-3)*6776286280 X1.9433) = 489650 - 547,586. = $(57,987.46) C I Scanned with CamScanner

lobouo Variance Std. Do labour per St. Rate clay = 1.20 hrs. = B 13.5olur. Actual: Dilabour worked - 205,000 hres Dolabour cost : $3587500 Clay gay - 160000 SR = $ 13.00 lbr. SQ 160,000 y 1.7 272000 hrs. CAR = 3587500 205000 = $ 17:51w. Ag_= 205000 h. 1) Dolab Rate variance = (SR-AR) XAC (13.00 - 19.50) x 205000 $(922,500) Hei _ D.lob. Efficiency Variance ( 59 - AQ)XSR / 272000 - 20500U) x 13.00 = $ 871000 Hin D.lab. Spending variance = ( 38 xse) - (AgrAR) = (272000 x 13) - (205000 X11:5) - 3536 000 - 3587500 = $( 515002 Hreamed with CamScanner

Variable Overhead Variance Standard: Voll per clan = 1.70 hrs. volt rate = $ 1.40 hr. Actual: - Clay Qly : 166,000 u šiu cost = $3,10,000 _Dlab. de eo s 205000 SR = 89' = $ 1.40lhr. 160,000 x 1.7hri : 272,000 hoge - AR AQ 310000 120500w = $1.51221 na 296200 tbl. 205000 m. . U.O1H - Rate voriance = (SR-AD) KAQ (1.40 -- 1.5122) X 205000 $ ( 23,001) L liin. Olih Effiuency variance = (3Q-AQ)X SR - (222000 - 205000) x 1.40 = $(249,2000) $93.500 dii) - all spending variance = (SQXSR) - (AO- I = (222000 x 140) - ( 205000 X 1.5122) -E 380,800 - 310001 • 207499 $(20,799) Scanne_aith CamScanner