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$16,800
10,500
4,200
$31,500
1,000
$31.50
$31.50
0.15
$31.35
$16,800
1,000
$16.80
2.
3.
$16,800
15,000
$ 1,800 F
The price and quantity variances together equal the total variance. If
the quantity variance is $1,200 U, then the price variance must be
$3,000 F:
Price variance.................................... $ 3,000 F
Quantity variance...............................
1,200 U
Total variance.................................... $ 1,800 F
581
Price Variance,
Quantity Variance,
$3,000 F
$1,200 U*
Total Variance,
$1,800 F
* Given.
** 1,000 units 2.8 yards per unit = 2,800 yards
5. The first step in computing the standard direct labor rate is to determine
the standard direct labor-hours allowed for the months production. The
standard direct labor-hours can be computed by working with the
variable manufacturing overhead costs, because they are based on
direct labor-hours worked:
Standard variable manufacturing overhead cost for March (a). $4,200
Standard variable manufacturing overhead rate per direct
labor-hour (b)..................................................................
$3.00
Standard direct labor-hours for March (a) (b).....................
1,400
Total standard direct labor cost for March
$10,500
=
Total standard direct labor-hours for March
1,400 DLHs
= $7.50 per DLH
$ 31.35
1,000
$31,350
$15,000
3,600
18,600
$12,750
Standard Hours
Allowed for Output, at
the Standard Rate
(SH SR)
Rate Variance,
Efficiency Variance,
$1,500 U
$750 U
Total Variance,
$2,250 U
*Given.
583
Actual Hours of
Input, at the
Actual Rate
(AH AR)
Standard Hours
Allowed for Output,
at the Standard Rate
(SH SR)
Rate Variance,
Efficiency Variance,
$900 F
$300 U
Total Variance,
$600 F
*Given.
8.
Standard
Quantity or
Hours
Direct materials ..............
Direct labor ....................
Variable manufacturing
overhead.....................
Total standard cost .........
2.8 yards1
1.4 hours2
1.4 hours
Standard
Price or
Rate
Standard
Cost
$6 per yard
$16.80
3
$7.50 per hour
10.50
$3 per hour
4.20
$31.50
From part 3.
1,400 standard hours (from part 5) 1,000 backpacks = 1.4
hours per backpack.
3
From part 5.
2