Solution
Standard labor hours Allowed | 8865 | |
Standard labor cost allowed | $ 53,190.00 | |
Labor Spending Variance | $ 1,185.00 | Unfavourable-U |
Labor rate Variance | $ 1,875.00 | Favourable-F |
Labor Efficiency variance | $ 3,060.00 | Unfavourable-U |
Variable overhead Rate Variance | $ 4,687.50 | Unfavourable-U |
Variable overhead Efficiency Variance | $ 2,295.00 | Unfavourable-U |
Working
Standard DATA for | 19700 | Units | |
Quantity (SQ) | Rate (SR) | Standard Cost | |
[A] | [B] | [A x B] | |
Direct labor | ( 0.45 Hour x 19700 Units)=8865 Hour | $ 6.00 | $ 53,190.00 |
Variable Overhead | ( 0.45 Hour x 19700 Units)=8865 Hour | $ 4.50 | $ 39,892.50 |
.
19700 | Units | ||
Quantity (AQ) | Rate (AR) | Actual Cost | |
Direct labor | 9375 | $ 5.80 | $ 54,375.00 |
Variable Overhead | 9375 | $ 5.00 | $ 46,875.00 |
.
Labor Rate Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Labor Hours |
( | $ 6.00 | - | $ 5.80 | ) | x | 9375 |
1875 | ||||||
Variance | $ 1,875.00 | Favourable-F | ||||
Labour Efficiency Variance | ||||||
( | Standard Hours | - | Actual Hours | ) | x | Standard Rate |
( | 8865 | - | 9375 | ) | x | $ 6.00 |
-3060 | ||||||
Variance | $ 3,060.00 | Unfavourable-U | ||||
Labor Spending Variance | ||||||
( | Standard Cost | - | Actual Cost | ) | ||
( | $ 53,190.00 | - | $ 54,375.00 | ) | ||
-1185 | ||||||
Variance | $ 1,185.00 | Unfavourable-U | ||||
Variable Overhead Rate Variance | ||||||
( | Standard Rate | - | Actual Rate | ) | x | Actual Labor Hours |
( | $ 4.50 | - | $ 5.00 | ) | x | 9375 |
$ (4,687.50) | ||||||
Variance | $ 4,687.50 | Unfavourable-U | ||||
Variable Overhead Efficiency Variance | ||||||
( | Standard Hours | - | Actual Hours | ) | x | Standard Rate |
( | 8865 | - | 9375 | ) | x | $ 4.50 |
$ (2,295.00) | ||||||
Variance | $ 2,295.00 | Unfavourable-U |
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to...
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