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.)
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.)
Related questions
Tharaldson Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost per Unit | |
| Direct material | 6.6 ounces | $ 5.00 per ounce | $33.00 |
| Direct labor | 0.8 hours | $ 10.00 per hour | $8.00 |
| Variable overhead | 0.8 hours | $ 5.00 per hour | $4.00 |
The company reported the following results concerning this product in June.
| Originally budgeted output | 2,000 units |
| Actual output | 2,500 units |
| Raw materials used in production | 19,000 ounces |
| Purchases of raw materials | 21,500 ounces |
| Actual direct labor-hours | 4,900 hours |
| Actual cost of raw materials purchases | $40,500 |
| Actual direct labor cost | $12,000 |
| Actual variable overhead cost | $3,000 |
The company applies variable overhead on the basis of direct labor hours. The direct material purchases variance is computed when the materials are purchased .
The materials quantity variance for June is:
Tharaldson Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
| Direct materials | 7.3 | ounces | $ | 3.00 | per ounce | $ | 21.90 | ||
| Direct labor | 0.7 | hours | $ | 17.00 | per hour | $ | 11.90 | ||
| Variable overhead | 0.7 | hours | $ | 6.00 | per hour | $ | 4.20 | ||
The company reported the following results concerning this product in June.
| Originally budgeted output | 2,700 | units | |
| Actual output | 2,300 | units | |
| Raw materials used in production | 18,500 | ounces | |
| Purchases of raw materials | 21,600 | ounces | |
| Actual direct labor-hours | 3,800 | hours | |
| Actual cost of raw materials purchases | $ | 42,100 | |
| Actual direct labor cost | $ | 12,700 | |
| Actual variable overhead cost | $ | 3,350 | |
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 price variance for June is:
Multiple Choice
$22,700 U
$22,700 F
$1,944 F
$1,944 U
Majer Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
| Direct materials | 6.1 | ounces | $ | 2.00 | per ounce | $ | 12.20 | ||
| Direct labor | 0.7 | hours | $ | 12.00 | per hour | $ | 8.40 | ||
| Variable overhead | 0.7 | hours | $ | 2.00 | per hour | $ | 1.40 | ||
The company reported the following results concerning this product in February.
| Originally budgeted output | 5,400 | units | |
| Actual output | 5,700 | units | |
| Raw materials used in production | 33,100 | ounces | |
| Actual direct labor-hours | 2,030 | hours | |
| Purchases of raw materials | 28,300 | ounces | |
| Actual price of raw materials | $ | 17.10 | per ounce |
| Actual direct labor rate | $ | 7.60 | per hour |
| Actual variable overhead rate | $ | 1.10 | 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 variable overhead rate variance for February is:
Multiple Choice
$1,827 F
$1,832 F
$1,827 U
$1,832 F
