Question

Sutherland Company produced 7,000 book bags in June and actos amounts were as follows: (Click the icon to view the actual amounts) Sutherlands standards were as follows: (Click the icon to view the standards.) Requirements 1. Compute cost and efficiency variances for direct materials, dired labor, and variable overhead 2. Compute the cost and volume variances for fred overhead Requirement 1. Compute cost and efficiency variances for direct materials, direct labor, and variable overhead Select the formulas to calculate direct materials cost and cliciency variances, then enter the variance amounts and the total (Abbreviations used AC - actual cost AD actual quantity, FOH = fixed overhead: SC standard cost, SQ standard quantity Label each variance as favorable (F) or unfavorable (U) Enter for any 70 balances. For any 50 variances, leave the favorable (FyUnfavorable (U) input blank) Formula Variance Direct materials cost variance (AC-SC) Direct materials oficiency variance Total direct materials variance Choose from any ist or enter any number in the input fields and then click Check Answer Checker Char All emaining 9 * o & 7 8 9 5 6 Р 1 o Y U Т. R. E j K Н. F G C

Answer 1

Based on the information available in the question, we can answer as follows:-

Materials Variances:-

a.) Direct Materials price variance:-

=(Actual rate - Standard rate) * Actual quantity used

= ($2 - $2) * 7,400 yards

= $0

Direct Materials Price Variance = $0

b.) Direct Materials Efficiency Variance:-

=(Actual Quantity - Standard quantity for actual output) * Standard rate per unit

=[7,400 - (7,000*1)] * $2

=400 * $2

Direct Materials Efficiency Variance =$800 Unfavorable.

Since the actual quantity is higher than the standard quantity at actual output, the variance is Unfavorable.

Labor variances:-

c.) Direct Labor Price Variance:-

=(Actual rate - Standard rate) * Actual hours worked

=($10 - $10.50) * 2,740 hours

= $0.5 * 2,740 hours

Direct Labor Price Variance = $1,370 Favorable

Since the actual rate per labor hour is lesser than the budgeted rate per labor hour, the variance is Favorable.

d.) Direct Labor efficiency variance

=(Actual hours - Standard hours for actual output) * Standard rate per hour

=[2,740 hours - (0.4 hours per bag* 7,000 hours] * $10.5 per hour

=(2,740 hours - 2,800 hours) * $10.5 per hour

= 60 hours * $10.5 per hour

Direct Labor Efficiency Variance = $900 Favorable

Since the actual hours is lesser than the standard hours for actual output, the variance is Favorable.

Variable Overhead Variances

e.) Variable overhead cost variance

=(Actual rate - Standard rate) * Actual hours

=(1.97 - $2) * 2,740 hours

Actual rate = $5,400/2,740 hours = $1.97 per hour

=$0.03 * 2,740 hours

=$82.2 Favorable.

Since the actual rate is lesser than the standard rate, the variance is favorable

f.) Variable overhead efficiency variance

=(Actual hours - Standard hours for actual output) * Standard rate per hour

=[2,740 hours - (0.4 hours per bag* 7,000 hours] * $2 per hour

=(2,740 hours - 2,800 hours) * $2 per hour

=60 hours * $2 per hour

Variable overhead efficiency variance =$120 Favorable

Since the actual hours is lesser than the standard hours, the variance is favorable.

Kindly note that we are supposed to answer a minimum of 4 questions, when there are multiple subsections within the same question that has been posted per the HOMEWORKLIB RULESs. Accordingly, i have answered the first 6 requirements. Request you to post the remaining question separately so that we can answer them as well. All the best and please let me know if you have any questions via comments :)