Question

Help Save my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate com Retu Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturi overhead is applied to products on the basis of direct labor-hours. Inputs Direct materials Direct labor Variable manufacturing overhead Standard Quantity or Hours per Unit of Output 8.2 ounces 0.6 hours 0.6 hours Standard Price or Rate $ 6.30 per ounce $21.80 per hour $ 4.60 per hour The company has reported the following actual results for the product for April: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours Actual direct labor cost Actual variable overhead cost 5,800 units 48,400 ounces $289,600 47,570 ounces 3,170 hours $ 73,240 $ 13,884 < Prev 5 of 5 Next arch

please help me with the ones that are wrong thanks

Answer 1

a) Material price variance = (Standard price - Actual price) x Actual quantity purchased

= (6.3-5.98) x 48400 = $15,320 F

Note; - Actual price = (Raw material purchased value / Quantity of raw material purchased)

= ($ 289,600 / 48400)

= $ 5.983471 per ounce (Take up to 6 digits after point for exact match)

b) Material Quantity variance = (Standard Quantity allowed - actual quantity of direct material used) x Standard price per unit of direct material

= [(5800 units x 8.2) - 47570] x 6.3

= $ 63 U

Note- Standard quantity allowed = (Actual output x standard quantity per unit) = (5800 x 8.2) = $ 47,560

c) Labor rate variance = (Standard rate - Actual rate) x Actual hours worked

= [21.8 – 23.104101)] x 3170

= $ 4134 U

Note: Actual rate = (Actual direct labor cost / actual direct labor hours) = ($ 73240 / 3170)

                                                                                                                    = $23.104101 per hour

d) Labor Efficiency variance = (Actual hours worked - Standard hours for actual output)x Standard Rate

= [(3170- 3480)] x 21.8

= $ 6758 U

Note: Standard hours for actual output = (Actual output x Standard hours per unit)

                                                               = (5800 x .06)

                                                                = 3480 hrs.

e) Variable overhead rate variance = (Standard overhead rate - Actual overhead rate - ) x Actual hours worked

= (4.6 – 4.379811) x 3170

= $ 698 F

Note: Actual overhead rate = (Actual variable overhead / Actual direct labor hours)

                                              = ($ 13,884/3170)

                                                = 4.379811 per hr.