Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 7.4
liters $ 7.00 per liter Direct labor 0.70 hours $ 21.70 per hour Variable manufacturing overhead 0.70 hours $ 5.90 per hour
The company has reported the following actual results for the product for September:
Actual output 9,600 units Raw materials purchased 75,000 liters Actual cost of raw materials purchased $ 562,500 Raw materials used in production 71,050 liters Actual direct labor-hours 6,410 hours Actual direct labor cost $ 142,302 Actual variable overhead cost $ 34,614
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September.
c. Compute the labor rate variance for September.
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead rate variance for September.
f. Compute the variable overhead efficiency variance for September.
Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
| Inputs | Standard Quantity or Hours per Unit of Output | Standard Price or Rate | |||||||||
| Direct materials | 7.4 | liters | $ | 7.00 | per liter | ||||||
| Direct labor | 0.70 | hours | $ | 21.70 | per hour | ||||||
| Variable manufacturing overhead | 0.70 | hours | $ | 5.90 | per hour | ||||||
The company has reported the following actual results for the product for September:
| Actual output | 9,600 | units | |
| Raw materials purchased | 75,000 | liters | |
| Actual cost of raw materials purchased | $ | 562,500 | |
| Raw materials used in production | 71,050 | liters | |
| Actual direct labor-hours | 6,410 | hours | |
| Actual direct labor cost | $ | 142,302 | |
| Actual variable overhead cost | $ | 34,614 | |
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September.
c. Compute the labor rate variance for September.
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead rate variance for September.
f. Compute the variable overhead efficiency variance for September.
Related questions
Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
| Inputs | Standard Quantity or Hours per Unit of Output | Standard Price or Rate | |||||||||
| Direct materials | 7.60 | liters | $ | 7.20 | per liter | ||||||
| Direct labor | 0.60 | hours | $ | 23.70 | per hour | ||||||
| Variable manufacturing overhead | 0.60 | hours | $ | 6.10 | per hour | ||||||
The company has reported the following actual results for the product for September:
| Actual output | 9,800 | units | |
| Raw materials purchased | 75,200 | liters | |
| Actual cost of raw materials purchased | $ | 564,500 | |
| Raw materials used in production | 74,500 | liters | |
| Actual direct labor-hours | 5,500 | hours | |
| Actual direct labor cost | $ | 135,302 | |
| Actual variable overhead cost | $ | 29,314 | |
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September.
c. Compute the labor rate variance for September.
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead rate variance for September.
f. Compute the variable overhead efficiency variance for September.
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
| Inputs | Standard Quantity or Hours per Unit of Output | Standard Price or Rate | |||||||||
| Direct materials | 8.6 | ounces | $ | 6.70 | per ounce | ||||||
| Direct labor | 0.5 | hours | $ | 19.70 | per hour | ||||||
| Variable manufacturing overhead | 0.5 | hours | $ | 5.00 | per hour | ||||||
The company has reported the following actual results for the product for April:
| Actual output | 6,200 | units | |
| Raw materials purchased | 55,050 | ounces | |
| Actual cost of raw materials purchased | $ | 309,640 | |
| Raw materials used in production | 53,350 | ounces | |
| Actual direct labor-hours | 2,910 | hours | |
| Actual direct labor cost | $ | 60,700 | |
| Actual variable overhead cost | $ | 13,681 | |
Required:
a. Compute the materials price variance for April.
b. Compute the materials quantity variance for April.
c. Compute the labor rate variance for April.
d. Compute the labor efficiency variance for April.
e. Compute the variable overhead rate variance for April.
f. Compute the variable overhead efficiency variance for April.
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Question 2
Miguez Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | ||||||||
| Direct materials | 2.3 | liters | $ | 7.00 | per liter | $ | 16.10 | |||
| Direct labor | 0.7 | hours | $ | 22.00 | per hour | $ | 15.40 | |||
| Variable overhead | 0.7 | hours | $ | 2.00 | per hour | $ | 1.40 | |||
The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 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 materials quantity variance for September is:
| $2,170 U | ||
| $2,232 U | ||
| $2,170 F | ||
| $2,232 F |
