Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Direct materials (clay) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($396,000.00 - 180,000.00 units) Standard Quantity 1.80 lbs. 1.80 hrs. 1.80 hrs. Standard Price (Rate) $ 1.90 per Ib. $11.00 per hr. $ 1.10 per hr. Standard Unit Cost $ 3.42 19.80 1.98 2.20 Barley Hopp had the following actual results last year: Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 185,000 338,200 $ 676,400 230,000 $3,680,000 $ 360,000 $ 380,000 Required: 1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable and "U" for unfavorable.) Direct Materials Price Variance Direct Materials Quantity Variance Direct Materials Spending Variance

Answer 1

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Barley Hopp Inc.	Finished Units	Input per unit	Input required	Rate per unit	Amount
Direct Material Variance
Standard Price allowed for Actual Output at Standard Price	185,000.00	1.80	333,000.00	1.90	632,700.00	A
Actual Quantity of Input, at Standard Price			338,200.00	1.90	642,580.00	B
Actual Quantity of Input, at Actual Price					676,400.00	C
Quantity Variance (B-A)					9,880.00	Unfavorable
Price Variance (C-B)					33,820.00	Unfavorable
Total Material Variance (C-A)					43,700.00	Unfavorable
Direct Labor Variance
Standard Hours allowed for Actual Output at Standard Rate	185,000.00	1.80	333,000.00	11.00	3,663,000.00	D
Actual Hours of Input, at Standard Rate			230,000.00	11.00	2,530,000.00	E
Actual Hours of Input, at Actual Rate					3,680,000.00	F
Efficiency Variance (E-D)					(1,133,000.00)	Favorable
Price Variance (F-E)					1,150,000.00	Unfavorable
Total Labor Variance (F-D)					17,000.00	Unfavorable
Variable Overhead Variance
Standard Hours allowed for Actual Output at Standard Rate	185,000.00	1.80	333,000.00	1.10	366,300.00	G
Actual Hours of Input, at Standard Rate			230,000.00	1.10	253,000.00	H
Actual Hours of Input, at Actual Rate					360,000.00	I
Variable overhead efficiency variance (H-G)					(113,300.00)	Favorable
Variable overhead Rate variance (I-H)					107,000.00	Unfavorable
Variable overhead Spending variance (I-G)					(6,300.00)	Favorable