Question

Question 14 Partially correct Mark 0.62 out of 1.00 P Hag question Variance Computations and Explanations Outdoor Company manufactures camping tents from a lightweight synthetic fabric. Each tent has a standard materials cost of $21, consisting of 4 yards of fabricat $5.25 per yard. The standards call for 2 hours of assembly at $10 per hour. The following data were recorded for October, the first month of operations: Fabric purchased 0,000 yards x 55.00 per yard Fabric used in production of 1,700 tents 7.000 yards Direct laborused 3.600 hoursx 510.75 per hour (a) Compute all standard cost variances for materials and labor. Materials price wariance (usage basis) Materials price variance purchase basis Material quantity wariance Labor rate variance bor efficiency variance (b) Determine the standard variable cost of 1,700 tents produced, separated into direct materials and labor. Direct materials Direct labor Total standard abeco 5 $ $ 35700 34000 9700 Check

Answer 1

Required (a) Material Price Variance (Usage basis) = $ Material Price Variance (purchase basis) = $ Material Quantity variance= $ Labor rate variance = $ Labor Efficiency variance = $ 1,750 Favorable 2,250 Favorable 1,050 Unfavorable 2,700 Unfavorable 2,000 Unfavorable Material Price Variance (Usage basis) = Actual Quantity consumed (Std price per yard - Actual price per yard) = 7,000 ( 5.25 -5.00 ) = $ 1,750 favorable Material Price Variance (purchase basis) = Actual Quantity purchased (Std price per yard - Actual price per yard) = 9,000 ( 5.25 -5.00) = $ 2250 favorable Material Quantity variance= Std price per yard (Std quantity for actual output - Actual quantity consumed) 5.25 (( 1700 x 4) - 7,000) = 1050 Unfavorable Labor rate variance = Actual labor hours used (Std rate per hour - Actual rate per hour) = 3600 ( 10.00 - 10.75) = $ 2,700 unfavorable Labor Efficiency variance = Std rate per hour ( Std hours required for actual output- Actual hours used) = 10.00 ( ( 1700 x2) - 3600) = $2,000 Unfavorable Required (b) Std cost for output of 1700 tents: Direct material (6800 yards @ 5.25) $ 35,700 Direct labor(3400 hours @10) $ 34,000 Total Std variable cost $ 69,700 Please comment if you have any doubt Please give thumps up if you are satisfied with the answer