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Bulluck Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...

Bulluck Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 3.5 grams $ 1.00 per gram Direct labor 0.7 hours $ 11.00 per hour Variable overhead 0.7 hours $ 2.00 per hour The company reported the following results concerning this product in July. Actual output 3,000 units Raw materials used in production 11,370 grams Actual direct labor-hours 1,910 hours Purchases of raw materials 12,100 grams Actual price of raw materials purchased $ 1.20 per gram Actual direct labor rate $ 11.40 per hour Actual variable overhead rate $ 2.10 per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for July is:

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Expert Solution

Actual DATA for

3000

units

Quantity (AQ)

Rate (AR)

Actual Cost

Direct Material

11370

$ 1.200

$      13,644.00

Direct labor

1910

$ 11.40

$      21,774.00

Variable Overhead

1910

$    2.10

$        4,011.00

Standard DATA for

3000

units

Quantity (SQ)

Rate (SR)

Standard Cost

Direct Material(3.5*3000)

10500

$    1.00

$      10,500.00

Direct labor (0.7*3000)

2100

$ 11.00

$      23,100.00

Variable Overhead (0.7*3000)

2100

$    2.00

$        4,200.00

Variable Overhead Efficiency Variance

(

Standard Hours

-

Actual Hours

)

x

Standard Rate

(

2100

-

1910

)

x

$ 2.00

$ 380

Variance

$ 380

Favorable-F

Variable overhead efficiency variance is due to change in labor hours used in the production.

Variable Overhead Efficiency variance for july is $380 Favorable.

ekkarill92 answered 2 years ago
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