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	2.00	pounds	$	16.50	per pound	$	33.00
Direct labor	1.00	hours	$	15.70	per hour	$	15.70
Variable manufacturing overhead	1.00	hours	$	9.30	per hour	$	9.30
Total standard cost per unit						$	58.00

	Total		Variances Reported
	Standard Cost*		Price or Rate			Quantity or Efficiency
Direct materials	$	561,000	$	10,440	F	$	33,000	U
Direct labor	$	266,900	$	3,600	U	$	15,700	U
Variable manufacturing overhead	$	158,100	$	4,000	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

Req 1.
Std material cost for actual output: 561000
Std material cost per unit:   33
Actual output: (561000/33): 17000 units
Rreq 2.
Std Qty allowed (17000*2): 34000 units
Std price : 16.50
Material Qty Variance = Std price (Std qty -Aactual qty)
33000 U = 16.50 (34000-Actual Qty)
Actual Qty = 36000 Units
Rreq 3.
Material price variance = Actual Qty (Std price-Actual price)
10440 F = 36000 (16.50- Actual price)
Actual Price= 16.21 per unit
Req 4.
Std labour hours: 17000 hours
Std labouor rate: 15.70
labour efficiency variance = 15700 U
Labour efficiency variance= Std rate (Std hours-Actual Hours)
15700 U = 15.70 (17000- Actual Hours)
Actual hours= 18000 hours
Req 5.
Labour rate variance = 3600 U
Labour rate variance = Actual hours (Std rate-Actual rate)
3600 U = 18000 (15.70 - Actual rate)
Actual rate = 15.90 per hour
Req 6.
Variable H rate variance= 4000 F
Variable OH rate variance= Actual Hours *Std Oh rate-Actual Variable OH
4000 F = 18000*9.3 - Actual variable Overheads
Actual variable Overheads = 163400