Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:

Inputs	(1) Standard Quantity or Hours		(2) Standard Price or Rate			Standard Cost (1) × (2)
Direct materials	2.20	pounds	$	16.70	per pound	$	36.74
Direct labor	1.00	hours	$	15.30	per hour	$	15.30
Variable manufacturing overhead	1.00	hours	$	9.30	per hour	$	9.30
Total standard cost per unit						$	61.34

	Total		Variances Reported
	Standard Cost*		Price or Rate			Quantity or Efficiency
Direct materials	$	551,100	$	10,150	F	$	33,400	U
Direct labor	$	229,500	$	3,200	U	$	15,300	U
Variable manufacturing overhead	$	139,500	$	4,700	F	$	?†	U

*Applied to Work in Process during the period.

The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.

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?

Answer 1

Answer 1
Direct material at standard cost	$      551,100
Divided by: Standard direct material cost per unit	$           36.74
Units were produced last period	15,000
Answer 2
Standard quantity in pound for unit produced (15000 units*2.20)	33,000
Total standard direct material cost for unit produced (33000*16.70)	551,100
Add: Unfavorable material usage variance	33,400
Standard cost for actual pounds used	584,500
Divided by: Standard price per pound	$           16.70
Actual quantity used in pound	35,000
Actual cost of material purchased (551100+33400-10150)	574,350
Add: Favorable material price variance	10,150
Standard cost of material purchased	584,500
Divided by: Standard price per pound	$           16.70
Actual quantity purchase in pound	35,000
Answer 3
Actual cost of material purchased	574,350
Divided by: Actual quantity purchase in pound	35,000
Actual cost of material per pound	$           16.41
Answer 4
Total standard direct labor cost for unit produced (15.30*15000)	229,500
Add: Unfavorable Labor efficiency variance	15,300
Standard cost for actual hour	244,800
Divided by: Standard hour rate	15
Actual hour worked	16,000
Answer 5
Standard cost for actual hour	244,800
Add: Unfavorable Labor rate variance	3,200
Actual labor cost	248,000
Divided by: actual hour	16,000
Actual hourly wages rate	$           15.50
Answer 6
Standard Hours	15000
Less: Actual Hours	-16000
Difference	-1000
Multiply: Standard variable overhead rate per Hour	9.30
Variable overhead efficiency variance	$        (9,300)
Indicate	Unfavorable
Standard Variable manufacturing overhead	139,500
Add: Unfavorable Variable overhead efficiency variance	9,300
Less: Favorable Variable overhead rate variance	4,700
Actual variable manufacturing overhead cost	144,100

Proof of above Answer

	Minus sign indicate unfavorable variance.
	Measure	Pound
	Standard price per Pound	$          16.70
	Actual price per Pound	$          16.41
	Standard quantity in Pounds	33000
	Actual quantity purchased in Pounds	35000
	Actual quantity used in Pounds	35000
	Standard price per Pound	16.70
Less	Actual price per Pound	-16.41
	Difference	0.29
Multiply	Actual quantity purchased in Pounds	35000
	Material price variance	$        10,150
	Indicate	Favorable
	Standard quantity in Pounds	33000
Less	Actual quantity used in Pounds	-35000
	Difference	-2000
Multiply	Standard price per Pound	16.70
	Material quantity variance	$     (33,400)
	Indicate	Unfavorable

	Minus sign indicate unfavorable variance.
	Measure	Hour
	Standard rate per Hour	$            15.30
	Actual rate per Hour	$            15.50
	Standard labor Hours	15000
	Actual labor Hours	16000
	Standard rate per Hour	15.30
Less	Actual rate per Hour	-15.50
	Difference	-0.20
Multiply	Actual labor Hours	16000
	Labor price (rate) variance	$          (3,200)
	Indicate	Unfavorable
	Standard labor Hours	15000
Less	Actual labor Hours	-16000
	Difference	-1000
Multiply	Standard rate per Hour	15.30
	Labor quantity (efficiency) variance	$       (15,300)
	Indicate	Unfavorable

	Minus sign indicate unfavorable variance.
	Measure	Hour
	Standard variable overhead rate per Hour	$    9.30000
	Actual variable overhead rate per Hour	$    9.00625
	Standard Hours	15000
	Actual Hours	16000
	Standard variable overhead rate per Hour	9.30000
Less	Actual variable overhead rate per Hour	-9.00625
	Difference	0.29375
Multiply	Actual Hours	16000
	Variable overhead rate variance	$         4,700
	Indicate	Favorable
	Standard Hours	15000
Less	Actual Hours	-16000
	Difference	-1000
Multiply	Standard variable overhead rate per Hour	9.30
	Variable overhead efficiency variance	$      (9,300)
	Indicate	Unfavorable