Milton company produces a product, the company uses a standardcost system.
Standardquantity/hours Standardprice/rate Standard variable cost/unit
DM ? $5/lb ?
DL ? ? ?
VariableOH ? $4/lb ?
During the month 500 items were produced and sold. Selectedinformation is given below.
MaterialUsed DirectLabor Variable Manufacturing OH
Total standardcost $12,800 $8,500 $1,700
for months production
Actual costsincurred $12,000 ? $1,720
Material Pricevariance ?
Material Quantity Variance $2,200 U
The following additional information is available forAugust.
Actual direct labor hours 450 hours
Difference between actual and standard variable cost peritem $0.15 Unfavorable
Assuming all materials purchased have been used in productiondetermine:
Direct labor rate variance:
a. $355U
b.$355F
c. $500F
d. $500U
$1710U
Variable overhead efficiency variance
a. $270U
b. $80F
c. $80U
d. $100F
e. $100U
Milton company produces a product, the company uses a standardcost system.
Standardquantity/hours Standardprice/rate Standard variable cost/unit
DM ? $5/lb ?
DL ? ? ?
VariableOH ? $4/lb ?
During the month 500 items were produced and sold. Selectedinformation is given below.
MaterialUsed DirectLabor Variable Manufacturing OH
Total standardcost $12,800 $8,500 $1,700
for months production
Actual costsincurred $12,000 ? $1,720
Material Pricevariance ?
Material Quantity Variance $2,200 U
The following additional information is available forAugust.
Actual direct labor hours 450 hours
Difference between actual and standard variable cost peritem $0.15 Unfavorable
Assuming all materials purchased have been used in productiondetermine:
Direct labor rate variance:
a. $355U
b.$355F
c. $500F
d. $500U
$1710U
Variable overhead efficiency variance
a. $270U
b. $80F
c. $80U
d. $100F
e. $100U
Related questions
Vitalite, Inc., produces a number ofproducts, including a body-wrap kit. Standard variable costsrelating to a single kit are given below:
| StandardQuantity or Hours | StandardPrice or Rate | Standard Cost | ||
| Direct materials | ? | $5per yard | $ ? | |
| Direct labor | ? | ? | ? | |
| Variable manufacturing overhead | ? | $4 perdirect labor-hour | ? | |
| Total standard cost per kit | $46 | |||
| | ||||
During August, 500 kits weremanufactured and sold. Selected information relating to themonth%u2019s production is given below: |
| MaterialsUsed | DirectLabor | Variable Manufacturing Overhead | ||
| Total standard cost* | ? | $8,500 | $1,700 | |
| Actual costs incurred | $12,000 | ? | $1,720 | |
| Materials price variance | ? | |||
| Materials quantity variance | $ 2,200 U | |||
| Labor rate variance | ? | |||
| Labor efficiency variance | ? | |||
| Variable overhead rate variance | ? | |||
| Variable overhead efficiency variance | ? | |||
| *For the month'sproduction. |
| The followingadditional information is available for August%u2019s production ofkits: |
| Actual direct labor-hours | 450 | |
| Difference between standard and actual cost per kitproduced during August | $.16 | U |
| Required: | |
| 1. | What was the total standard cost ofthe materials used during August? (Omit the "$" sign in yourresponse.) |
| Standard cost | $ |
| 2. | How many yards of material arerequired at standard per kit? (Do not round intermediatecalculations. Round your final answer to 2 decimalplaces.) |
| Number of yards | yards per kit |
| 3. | What was the materials pricevariance for August if there were no beginning or endinginventories of materials? (Input all amounts as positivevalues. Do not round intermediate calculations. Leave no cellsblank - be certain to enter "0" wherever required. Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance). Omitthe "$" sign in your response.) |
| Material price variance | $ |
| 4. | What is the standard direct laborrate per hour? (Omit the "$" sign in yourresponse.) |
| Standard direct labor rate | $ | perDLH |
| 5. | What was the labor rate variance forAugust? The labor efficiency variance? (Input all amounts as positivevalues. Do not round intermediate calculations. Leave no cellsblank - be certain to enter "0" wherever required. Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zero variance). Omitthe "$" sign in your response.) |
| Labor rate variance | $ | |
| Labor efficiency variance | $ |
| 6. | What was the variable overhead ratevariance for August? The variable overhead efficiency variance?(Input all amountsas positive values. Do not round intermediate calculations. Leaveno cells blank - be certain to enter "0" wherever required.Indicate the effect of each variance by selecting "F" forfavorable, "U" for unfavorable, and "None" for no effect (i.e.,zero variance). Omit the "$" sign in your response.) |
| Variable overhead rate variance | $ | |
| Variable overhead efficiency variance | $ |
| 7. | Complete the standard cost card forone kit shown at the beginning of the problem. (Do not round intermediatecalculations. Round your answers to 2 decimalplaces. Omit the "$" sign in your response.) |
| StandardQuantity or Hours | Standard Price or Rate | StandardCost | |||
| Direct materials | yards | $5per yard | $ | ||
| Direct labor | hours | $ per hour | |||
| Variable manufacturing overhead | hours | $4 per directlabor-hour | |||
| Total standard cost per kit | $46 | ||||
| | |||||
