Question

In: Accounting

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

Kartman Corporation makes a product with the following standard costs:

Standard Quantity or
Hours		 Standard Price or
Rate		 Standard Cost Per Unit
Direct materials 6.8 pounds $ 7.30 per pound $ 49.64
Direct labor 0.5 hours $27.00 per hour $ 13.50
Variable overhead 0.5 hours $4.30 per hour $ 2.15

In June the company's budgeted production was 3,700 units but the actual production was 3,800 units. The company used 22,450 pounds of the direct material and 2,320 direct labor-hours to produce this output. During the month, the company purchased 25,700 pounds of the direct material at a cost of $173,180. The actual direct labor cost was $57,321 and the actual variable overhead cost was $9,631.

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 rate variance for June is:

Multiple Choice

  • $283 Unfavorable

  • $283 Favorable

  • $345 Favorable

  • $345 Unfavorable

Solutions

Expert Solution

ANSWER. C. $345 FAVORABLE

VARIABLE OVERHEAD RATE VARIANCE = ACTUAL HOURS * ( ACTUAL RATE - STANDARD RATE)

= 2,320 HOURS * ( $9631 / 2320 HOURS - $4.30 PER HOUR)

= 2,320 HOURS * ($4.1512 PER HOUR - $4.30 PER HOUR)

= $345 (FAVORABLE)

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or...
Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 10.4 kilos $ 7.90 per kilo Direct labor 0.3 hours $ 39.00 per hour Variable overhead 0.3 hours $ 7.90 per hour The company reported the following results concerning this product in August. Actual output 5,100 units Raw materials used in production 30,930 kilos Purchases of raw materials 33,500 kilos Actual direct labor-hours 1,120 hours Actual cost of raw materials purchases...
Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or...
Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 2.0 grams $ 7.00 per gram Direct labor 0.8 hours $ 16.00 per hour Variable overhead 0.8 hours $ 4.00 per hour The company produced 4,500 units in January using 10,260 grams of direct material and 2,240 direct labor-hours. During the month, the company purchased 10,830 grams of the direct material at $7.20 per gram. The actual direct labor rate was...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 7.2 ounces $ 2.00 per ounce $ 14.40 Direct labor 0.3 hours $ 16.00 per hour $ 4.80 Variable overhead 0.3 hours $ 5.00 per hour $ 1.50 The company reported the following results concerning this product in June. Originally budgeted output 2,600 units Actual output 2,200 units Raw materials used in production 20,400 ounces Purchases...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.5 ounces $ 2.00 per ounce $ 13.00 Direct labor 0.2 hours $ 23.00 per hour $ 4.60 Variable overhead 0.2 hours $ 6.00 per hour $ 1.20 The company reported the following results concerning this product in June. Originally budgeted output 2,700 units Actual output 2,800 units Raw materials used in production 19,380 ounces Purchases...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 5.5 ounces $ 2.00 per ounce $ 11.00 Direct labor 0.4 hours $ 11.00 per hour $ 4.40 Variable overhead 0.4 hours $ 8.00 per hour $ 3.20 The company reported the following results concerning this product in June. Originally budgeted output 4,100 units Actual output 4,100 units Raw materials used in production 20,500 ounces Purchases...
Milar Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Milar Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 7.7 pounds $ 4.00 per pound Direct labor 0.1 hours $ 20.00 per hour Variable overhead 0.1 hours $ 4.00 per hour In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 6.8 ounces $ 4.00 per ounce $ 27.20 Direct labor 0.5 hours $ 12.00 per hour $ 6.00 Variable overhead 0.5 hours $ 7.00 per hour $ 3.50 The company reported the following results concerning this product in June. Originally budgeted output 2,200 units Actual output 2,700 units Raw materials used in production 16,900 ounces Purchases...
Oddo Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Oddo Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit   Direct materials 3.0 ounces    $8.90 per ounce $26.70             Direct labor 0.7 hours    $25.00 per hour $17.50             Variable overhead 0.6 hours    $4.00 per hour $2.40           The company reported the following results concerning this product in December.   Originally budgeted output 4,590   units   Actual output 4,390   units   Raw materials used in production 13,490   ounces   Actual direct labor-hours 2,954...
Gallego Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Gallego 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...
Gilder Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price...
Gilder Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit   Direct materials 4.0 grams     $8.00 per gram $32.00              Direct labor 0.6 hours     $12.00 per hour $7.20              Variable overhead 0.6 hours     $8.00 per hour $4.80            The company reported the following results concerning this product in June.   Originally budgeted output 7,300   units   Actual output 7,200   units   Raw materials used in production 28,340   grams   Purchases of raw materials...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT