Question

1.) Exeter has material standard of 1 pound per unit of output. Each pound has a standard price of $25 per pound. During July, Exeter paid $133,000 for 4,960 pounds, which they used to produce 4,780 units. What is direct materials quantity variance?

Answer: $4,500 Unfavorable

2) Whitman has direct labor standard of 2 hours per unit of output. Each Employee has a standard wage rate of $23.50 per hour. During July, Whitman paid $190,400 to employees for 8,960 labor hours worked. 4,770 units were produced during July. What is direct labor efficiency variance?

Answer: $13,630 Favorable

3) Raven Applies overhead based on direct labor hours. The variable overhead standard is 2 hours at $11 per hour . During July, Raven spent $116,700 for variable overhead 8,890 labor hours were used to produce 4,700 units. What is variable overhead efficiency variance?

Answer: $5,610 Favorable

4) Venus Company applies overhead based on direct labor hours. The variable overhead standard is 10 hours at $3.50 per hour. During October, Venus company spent $157,600 for variable overhead. 47,440 labor hours were used to produce 4,880 units. What is the over or under applied variable overhead ?

Note: I wish to learn how to solve the problems by seeing the work or formulas, please. Thank you.

Answer 1

Materials Quantity Variance

= (Standard Quantity allowed - Actual Quantity) * Standard price

= (4,780*1 - 4,960)*25

= (4,780 - 4,960)*25

= 4500 Unfavorable