Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: (2 (1) Standard Standard Standard Quantity or Price Cost Inputs Hours or Rate (1) (2) Direct materia 2.30 pounds $17.ee per pound $39.10 Direct labor 1.ee hours $15.70 per hour $15.70 Variable manufacturing overhead 1.ee hours $9.40 per hour $ 9.42 Total standard cost per unit $64.20 Direct materials Direct labor Variable manufacturing overhead Total Variances Reported Standard Price Quantity or Cost or Rate Efficiency $742,900 $13,253 F $ 34,000 U 296,300 4,600 0 15,760 0 $178,600 $ 4,300 F $ tu Work in Process during the period IN SINGAR The company's manufacturing overhead cost is applied to production on the basis of direct labor hours. All of the materials during the period were used in production. Work in process inventories are insignificant and can be ignored aduced last period?urchased and used in wer to 2 decimal pla Required: 1. How many units were produced last period? 2. How many pounds of direct material were purchased and used in production? 3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.) 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.) 6. How much actual variable manufacturing overhead cost was incurred during the period? 1. 2. 3. 4. 5. 6. Number of units produced Pounds of direct material purchased and used in production Actual cost per pound Actual direct labor-hours Actual rate per direct labor hour Actual variable manufacturing overhead cost

Answer 1

1. Number of units produced = $742900/$39.10 = 19000 units

2. Material Quantity Variance = (Actual Quantity - Standard Quantity) x Standard Price
$34000 = (Actual Quantity - 19000x2.3) x $17
Actual Quantity used = 45700 units

3. Material Price Variance = (Actual Price - Standard Price) x Actual Quantity
-$13253 = (Actual Price - 17) x 45700
Actual Price per pound = $16.71 per pound

4. Direct Labor efficiency Variance = (Actual hours - Standard hours) x Standard rate
$15700 = (Actual hours - 19000x1) x $15.70
Actual hours = 20000 hours

5. Direct labor rate variance = (Actual rate - Standard rate) x Actual hours
$4000 = (Actual Rate - $15.70) x 20000
Actual Rate = $15.90 per hour

6. Variable Overhead rate variance = (Actual rate - Standard rate) x Actual hours
$-4300 = (Actual Rate - $9.40) x 20000
Actual Rate = $9.185 per hour

Actual Variable Overhead = 20000 x $9.185 = $183700