Question

Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Materials price variances is calculated on material purchased and materials quantity is based on Material used in production. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.

Inputs	Standard Quantity or Hours per Unit of Output			Standard Price or Rate
Direct materials		10.0	ounces	$	8.10	per ounce
Direct labor		0.5	hours	$	24.70	per hour
Variable manufacturing overhead		0.50	hours	$	6.40	per hour

The company has reported the following actual results for the product for April:

Actual output		7600	units
Raw materials purchased		50,200	ounces
Actual cost of raw materials purchased	$	386,210
Raw materials used in production		76,030	ounces
Actual direct labor-hours		3450	hours
Actual direct labor cost	$	88,880
Actual variable overhead cost	$	21,295

Required:

Enter all numbers as positive and rounded to the nearest dollar
Materials price variance	$
Materials quantity variance	$
Labor rate variance	$
Labor efficiency variance	$
Variable overhead rate variance	$
Variable overhead efficiency variance	$

Answer 1

Answer

Material Price Variance	$                                                  30,912 (based on qty used) or $ 20,410 (based on qty purchased)	Favourable-F
Material Quantity Variance	$                                                        243.00	Unfavourable-U
Labor Rate Variance	$                                                     3,665.00	Unfavourable-U
Labour Efficiency Variance	$                                                     8,645.00	Favourable-F
Variable Overhead Rate Variance	$                                                        785.00	Favourable-F
Variable Overhead Efficiency Variance	$                                                     2,240.00	Favourable-F

--Working

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                                8.10	-	$                       7.69	)	x	76030
	30911.7988
	Variance		$            30,911.80			Favourable-F
Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	76000	-	76030	)	x	$                           8.10
	-243
	Variance		$                  243.00			Unfavourable-U
Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                              24.70	-	$                    25.76	)	x	3450
	-3665
	Variance		$              3,665.00			Unfavourable-U
Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	3800	-	3450	)	x	$                        24.70
	8645
	Variance		$             8,645.00			Favourable-F
Variable Overhead Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                                6.40	-	$                       6.17	)	x	3450
	785
	Variance		$                  785.00			Favourable-F
Variable Overhead Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	3800	-	3450	)	x	$                           6.40
	2240
	Variance		$              2,240.00			Favourable-F