Question

10 material (day Direct labor Variable manufacturing overhead (based on direct labor hours) manufacturing overhead (5392,990.00 140,000.00 units 70 hrs. $ 1.1e per hr Barley Hopp had the following actual results last year 145,000 258,280 438,940 Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct labor COS Variable overhead cost Fixed Overhead cost 190,- Salad 410,000 Required: 1. Calculate the direct materiais price, quantity and total spending variances for Barley Hopp. 2. Calculate the direct labor Patel efficiency and total spending variances for Barley Hopp 3. Calculate the variable overhead rate, efficiency and total spending variances for Barley Hopp.

Answer 1

Given:

	Standard
	Quantity	Rate	Amount
Direct Materials	1.70	$      1.80	$                3.06
Direct Labor	1.70	$   10.00	$              17.00
Variable Overheads	1.70	$      1.10	$                1.87
Fixed Overheads			$                2.00

	Budgeted cost based on Actual output			Actual			Variance
	Quantity*	Rate	Amount	Quantity	Rate@	Amount
Direct Materials	246,500	$      1.80	$    443,700.00	258,200	$              1.70	$    438,940.00	$    4,760.00
Direct Labor	246,500	$   10.00	$ 2,465,000.00	190,000	$            13.20	$ 2,508,000.00	$(43,000.00)
Variable Overheads	246,500	$      1.10	$    271,150.00	190,000	$              1.47	$    280,000.00	$   (8,850.00)

*Budgeted / Required numbers are Calculated on the basis of Actual production (145,000) *standard quantities/time)

@Rates are calculated by dividing Actual amount by actual quantity

Direct Materials Price Variance

Direct Labor Rate Variance

Variable Overhead Rate Variance

= Actual Quantity * (Standard Price - Actual Price)

= Actual Time * (Standard Rate - Actual Rate)

= Actual Time * (Standard Rate - Actual Rate)

= 258,200 * (1.80 - 1.70)

= 190,000 * (10.00 - 13.20)

= 190,000 * (1.10 - 1.47)

$              25,820.00

(F)

$ 608,000.00

(A)

$ 70,300.00

(A)

Direct Materials Quantity Variance

Direct Labor Efficiency Variance

Variable Overhead Efficiency Variance

= Standard Price * (Standard Quantity - Actual Quantity)

= Standard Rate * (Standard Time - Actual Time)

= Standard Rate * (Standard Time - Actual Time)

= 1.80 * (246,500 - 258,200)

= 10.00 * (246,500 - 190,000)

= 1.10 * (246,500 - 190,000)

$              21,060.00

(A)

$ 565,000.00

(F)

$ 62,150.00

(F)

Direct Materials Spending Variance

Direct Labor Spending Variance

Variable Overhead Spending Variance

= (Standard Price*Standard Quantity) - (Actual Price*Actual Quantity)

= (Standard Rate*Standard Time) - (Actual Rate*Actual Time)

= (Standard Rate*Standard Time) - (Actual Rate*Actual Time)

= 443,700 - 438,940

= 2,465,000 - 2,508,000

= 271,150 - 280,000

$                4,760.00

(F)

$    43,000.00

(A)

$    8,850.00

(A)

| Quantity Direct Materials 1.70 Direct Labor 1.70 Variable Overheads 1.70 Fixed Overheads Standard Rate $ 1.80 $ 10.00 $ 1.10 $ $ $ $ Amount 3.06 17.00 1.87 2.00 Budgeted cost based on Actual output Actual Quantity* Rate Amount Quantity Rate@ Amount Variance Direct Materials 246,500 $ 1.80 $ 443,700.00 258,200 $ 1.70 $ 438,940.00 $ 4,760.00 Direct Labor 246,500 $ 10.00 $2,465,000.00 190,000 $ 13.20 $2,508,000.00 $(43,000.00) Variable Overheads 246,500 $ 1.10 $ 271,150.00 190,000 $ 1.47 $ 280,000.00 $ (8.850.00) *Budgeted / Required numbers are Calculated on the basis of Actual production (145,000) *standard quantities/time) @Rates are calculated by dividing Actual amount by actual quantity Direct Materials Price Variance = Actual Quantity * (Standard Price - Actual Price) = 258,200 * (1.80 - 1.70) $ 25,820.00 (F) Direct Labor Rate Variance = Actual Time * (Standard Rate - Actual Rate) = 190,000 * (10.00 - 13.20) $ 608,000.00 (A) Variable Overhead Rate Variance = Actual Time * (Standard Rate - Actual Rate) = 190,000 * (1.10 - 1.47) $ 70,300.00 (A) Direct Materials Quantity Variance = Standard Price * (Standard Quantity - Actual Quantity) = 1.80 * (246,500 - 258,200) $ 21,060.00 (A) Direct Labor Efficiency Variance = Standard Rate * (Standard Time - Actual Time) = 10.00 * (246,500 - 190,000) $ 565,000.00 (F) Variable Overhead Efficiency Variance = Standard Rate * (Standard Time - Actual Time) = 1.10 * (246,500 - 190,000) $ 62,150.00 (F) Direct Materials Spending Variance = (Standard Price*Standard Quantity) - (Actual Price* Actual Quantity) = 443,700 - 438,940 4,760.00 (6) Direct Labor Spending Variance = (Standard Rate*Standard Time) - (Actual Rate* Actual Time) = 2,465,000 - 2,508,000 $ 43,000.00 (A) Variable Overhead Spending Variance = (Standard Rate*Standard Time) - (Actual Rate* Actual Time) = 271,150 - 280,000 | $ 8,850.00 (A)

I hope this helps :)