Question

Flint Clothiers is a small company that manufactures tall-men’s suits. The company has used a standard cost accounting system. In May 2017, 10,000 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,500 direct labor hours. All materials purchased were used.

Problem 15-3 (Part Level Submission) Flint Clothiers is a small company that manufacturas tall-men's suits. The company has used a standard cost accounting system. In May 2017, 10,000 suits were produced. The following standard and actual cast data applied to the month of May when normal capacity was 14,500 direct labor hours. All materials purchased were used. Cost Element Direct materials Direct labor Overhead Standard (per unit) 10 yards at $4.50 per yarn 1.10 hours at $14.00 per hour 1.10 hours at 56.10 per hour (lixed $3.60; variable $2.80) Actual $443,090 for 100,700 yards (54.40 per yand) $169,650 for 11,700 hours ($14.50 per hour) $48,700 fixed overhead $36,500 variable overhead Overhead is applied on the basis of direct labur hours. Aromal capacity, budgeled lixed overhead costs were $52,200, and bullyeled variable over het was 540,500. (a) Your answer is partially correct. Try again. Cornpute the lulel, price, and quantity veriences lur (1) malerials and (2) labor. (Round answers to 0 decimal places, e.g. 125.) (1) Total materials variante Favorable Materials price variance Favorable Malerials quanlily variance I 5,930. Unfavorable 200.00 (2) Total labor varianoc Unfavorable Labor ure variance Unfavorable Laber quantity variance Unfavorable

Answer 1

Solution

Total Material Variance	$           6,920.00	Favourable-F
Material Price Variance	$         10,070.00	Favourable-F
Material quantity variance	$           3,150.00	Unfavourable-U
Total Labor variance	$         15,650.00	Unfavourable-U
Labor rate variance	$           5,850.00	Unfavourable-U
Labor Efficiency variance	$           9,800.00	Unfavourable-U

Working

Actual DATA for		10000	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct Material	100700	$       4.40	$       443,080.00
Direct labor	11700	$     14.50	$       169,650.00

.

Standard DATA for		10000	Units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct Material	( 10 yards x 10000 Units)=100000 yards	$                   4.50	$          450,000.00
Direct labor	( 1.1 Hour x 10000 Units)=11000 Hour	$                14.00	$          154,000.00

.

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                    4.50	-	$                     4.40	)	x	100700
	10070
	Variance		$           10,070.00			Favourable-F
Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	100000	-	100700	)	x	$              4.50
	-3150
	Variance		$             3,150.00			Unfavourable-U
Material Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$       450,000.00	-	$        443,080.00	)
	6920
	Variance		$             6,920.00			Favourable-F
Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                  14.00	-	$                   14.50	)	x	11700
	-5850
	Variance		$             5,850.00			Unfavourable-U
Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	11000	-	11700	)	x	$           14.00
	-9800
	Variance		$             9,800.00			Unfavourable-U
Labor Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$       154,000.00	-	$        169,650.00	)
	-15650
	Variance		$           15,650.00			Unfavourable-U