Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows:

	Standard Quantity		Standard Price (Rate)			Standard Unit Cost
Direct materials (clay)	1.60	lbs.	$	1.70	per lb.	$	2.72
Direct labor	1.60	hrs.	$	14.00	per hr.		22.40
Variable manufacturing overhead (based on direct labor hours)	1.60	hrs.	$	1.30	per hr.		2.08
Fixed manufacturing overhead ($352,000.00 ÷ 160,000.00 units)							2.20

Barley Hopp had the following actual results last year:

Number of units produced and sold		165,000
Number of pounds of clay used		298,200
Cost of clay	$	536,760
Number of labor hours worked		210,000
Direct labor cost	$	3,780,000
Variable overhead cost	$	320,000
Fixed overhead cost	$	355,000

Required:
1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp.
2. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp.
3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.

1.

Direct Materials Price Variance
Direct Materials Quantity Variance
Direct Materials Spending Variance

2.

Direct Labor Rate Variance
Direct Labor Efficiency Variance
Direct Labor Spending Variance

3.

Variable Overhead Rate Variance
Variable Overhead Efficiency Variance
Variable Overhead Spending Variance

Answer 1