The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July:
The variable overhead efficiency variance for July is:
Multiple Choice
$13,220 F
$13,220 U
$2,180 U
$2,180 F
Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
Direct materials | 6.3 | ounces | $ | 2.00 | per ounce | $ | 12.60 | ||
Direct labor | 0.4 | hours | $ | 11.00 | per hour | $ | 4.40 | ||
Variable overhead | 0.4 | hours | $ | 6.00 | per hour | $ | 2.40 | ||
The company reported the following results concerning this product in June.
Originally budgeted output | 3,300 | units | |
Actual output | 2,600 | units | |
Raw materials used in production | 21,300 | ounces | |
Purchases of raw materials | 22,400 | ounces | |
Actual direct labor-hours | 470 | hours | |
Actual cost of raw materials purchases | $ | 42,000 | |
Actual direct labor cost | $ | 13,300 | |
Actual variable overhead cost | $ | 3,650 | |
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor rate variance for June is:
Garrison 16e Rechecks 2017-10-31
Multiple Choice
$2,552 U
$8,130 U
$8,130 F
$2,552 F
1. Variable overhead efficiency variance
= VOH spending variance - VOH rate variance
= 7700U - 5520U
= 2180 U
.
2. Labor rate variance = (SR-AR) *AH
= (11-13300/470)*470
= 8130 U
The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to...
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