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)	1.90	lbs.	$	2.00	per lb.	$	3.80
Direct labor	1.90	hrs.	$	15.00	per hr.		28.50
Variable manufacturing overhead (based on direct labor hours)	1.90	hrs.	$	1.20	per hr.		2.28
Fixed manufacturing overhead ($520,000.00 ÷ 200,000.00 units)							2.60

Barley Hopp had the following actual results last year:

Number of units produced and sold		205,000
Number of pounds of clay used		378,200
Cost of clay	$	794,220
Number of labor hours worked		250,000
Direct labor cost	$	5,875,000
Variable overhead cost	$	450,000
Fixed overhead cost	$	510,000

Required:
1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.)

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

2. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.)

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

3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)

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

Answer 1

1)
	direct material price variance
	(Actua price - standard price)*aqpurchased
	(794,220    - 378200*2)
	37820	U
	direct material qty variance
	(AQ used - standard qty allowed)*standard rate
	(378,200   - 205000*1.90)*2
	22600	F
	direct materials spending variance
	15220	U
2)	direct labor rate variance
	(Actual price - standard rate )*ah
	(5,875,000     - 15*250000)
	2125000	U
	direct labor efficiency vriance
	(AH - SG)*standard rate
	(250,000   - 205000*1.9)*15
	2092500	F
	direct labor spending variance
	32500	U
3)
	variable overhead rate
	(Actual price - standard rate )*ah
	(450,000 - 250000*1.2)
	150000	U
	variable overhead efficiecny variance
	(AH - SG)*standard rate
	(250000   - 205000*1.9)*1.2
	167400	F
	direct labor spending variance
	17400	F