Question

Problem 3 (Textbook Reference: 8-6) - Compute materials and labor variances Based on standard volume of 96,000 units per month, the standard cost of the product manufactured by Tahoe Company consists of Direct materials (0.25 pounds x 58 per pound) S 2.00 Direct labor (0.5 hours x 57.60 per hour) $ 3,80 Variable manufacturing overhead per unit S 250 Fixed manufacturing overhead ($144,000 in total) S 1.50 $ 9,80 A total of 25.200 pounds of materials was purchased at $8.40 per pound. During May, 98,400 units were produced with the following costs: Direct materials used (24,000 pounds x 58.40 per pound) $ 201,600 Direct labor (50,000 hours x 57.80 per hour) $ 190,000 Variable manufacturing overhead S 249.000 Fixed manufacturing overhead $ 145,000 Required: (elle For U to indicate whether the variance is favore or unfavorable) 1. Compute the materials price variance: b Compute the materials quantity usage variance: For U c. Compute the total materials variance: d Compute the labor rate variance e. Compute the labor efficiency variance f. Compute the total labor variance: **You must show your work to receive credit

Answer 1

Please give positive ratings so I can keep answering. Thanks!

Problem 3	Finished Units	Input per unit	Input required	Rate per unit	Amount
Direct Material Variance
Standard Price allowed for Actual Output at Standard Price	98,400.00	0.25	24,600.00	8.00	196,800.00	A
Actual Quantity of Input, at Standard Price			24,000.00	8.00	192,000.00	B
Quantity Variance (C=B-A)					(4,800.00)	Favorable
Actual Quantity of Purchase, at Standard Price			25,200.00	8.00	201,600.00	D
Actual Quantity of Purchase, at Actual Price			25,200.00	8.40	211,680.00	E
Price Variance (F=E-D)					10,080.00	Unfavorable
Total Material Variance (G=C+F)					5,280.00	Unfavorable
Direct Labor Variance
Standard Hours allowed for Actual Output at Standard Rate	98,400.00	0.50	49,200.00	7.60	373,920.00	H
Actual Hours of Input, at Standard Rate			50,000.00	7.60	380,000.00	I
Actual Hours of Input, at Actual Rate					390,000.00	J
Efficiency Variance (I-H)					6,080.00	Unfavorable
Price Variance (J-I)					10,000.00	Unfavorable
Total Labor Variance (F-H)					16,080.00	Unfavorable
Problem 4	Finished Units	Input per unit	Input required	Rate per unit	Amount
Direct Material Variance
Standard Price allowed for Actual Output at Standard Price	143,000.00	6.30	900,900.00	0.20	180,180.00	A
Actual Quantity of Input, at Standard Price			901,200.00	0.20	180,240.00	B
Quantity Variance (C=B-A)					60.00	Unfavorable
Actual Quantity of Purchase, at Standard Price			901,200.00	0.20	180,240.00	D
Actual Quantity of Purchase, at Actual Price			901,200.00	0.21	189,252.00	E
Price Variance (F=E-D)					9,012.00	Unfavorable
Total Material Variance (G=C+F)					9,072.00	Unfavorable
Direct Labor Variance
Standard Hours allowed for Actual Output at Standard Rate	143,000.00	0.08	11,440.00	18.00	205,920.00	H
Actual Hours of Input, at Standard Rate			11,300.00	18.00	203,400.00	I
Actual Hours of Input, at Actual Rate			11,300.00	17.30	195,490.00	J
Efficiency Variance (I-H)					(2,520.00)	Favorable
Price Variance (J-I)					(7,910.00)	Favorable
Total Labor Variance (F-H)					(10,430.00)	Favorable