Question
In: Accounting
Galeazzi Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Galeazzi Corporation makes a product with the following standard costs:
|
Standard Quantity or Hours |
Standard Price or Rate |
||
|
Direct materials.......... |
3.1 pounds |
$6.00 per pound |
|
|
Direct labor................ |
0.8 hours |
$18.00 per hour |
|
|
Variable overhead...... |
0.8 hours |
$6.00 per hour |
In October the company produced 3,000 units using
8,380 pounds of the direct material and 2,610 direct labor-hours. During the month, the company purchased 9,500 pounds of the direct material at a total cost of $55,100. The actual direct labor cost for the month was $48,546 and the actual variable overhead cost was $16,965. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
Solutions
Expert Solution
| Standard Cost: | |||||||||
| Particulars | Qty | Rate | Amt | ||||||
| Direct Material | 3.1 | 6.00 | 18.60 | ||||||
| Direct Labor | 0.8 | 18.00 | 14.40 | ||||||
| Variable OH | 0.8 | 6.00 | 4.80 | ||||||
| 37.80 | |||||||||
| Units | 3000 | ||||||||
| Standard Cost for Actual: | |||||||||
| Particulars | Qty | Rate | Amt | ||||||
| Direct Material | 9300 | 6.00 | 55,800 | ||||||
| Direct Labor | 2400 | 18.00 | 43,200 | ||||||
| Variable OH | 2400 | 6.00 | 14,400 | ||||||
| 1,13,400 | |||||||||
| Actual Cost for Actual Production: | |||||||||
| Particulars | Qty | Rate | Amt | Qty Purchased | Amt | PU Cost | |||
| Direct Material | 8380 | 5.80 | 48,604 | 9500 | 55100 | 5.80 | |||
| Direct Labor | 2610 | 18.60 | 48,546 | ||||||
| Variable OH | 2610 | 6.50 | 16,965 | ||||||
| 1,14,115 | |||||||||
| A | Material Price Variance: | F/A | Total Material | ||||||
| (SP-AP)Actual Qty Consumed | Variance | ||||||||
| (6-5.80)*8380 | |||||||||
| 1676 | F | ||||||||
| B | Material Usage Variance: | ||||||||
| (SQ-AQ)SP | |||||||||
| (9300-8380)6 | |||||||||
| 5520 | F | 7196 | |||||||
| C | Labor Price Variance: | Total Labor | |||||||
| (SP-AP)Actual Hours | Variance | ||||||||
| (18-18.60)*2610 | |||||||||
| -1566 | A | ||||||||
| D | Labor Eff Variance: | ||||||||
| (SH-AH)SP | |||||||||
| (2400-2610)18 | |||||||||
| -3780 | A | -5346 | |||||||
| E | VOH Price Variance: | Total VOH | |||||||
| (SP-AP)Actual Hours | Variance | ||||||||
| (6-6.50)*2610 | |||||||||
| -1305 | A | ||||||||
| F | VOH Eff Variance: | ||||||||
| (SH-AH)SP | |||||||||
| (2400-2610)6 | |||||||||
| -1260 | F | -2565 | |||||||
ekkarill92 answered 1 year agoRelated Solutions
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