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 ($425,500.00 + 185,000.00 units) Standard Quantity 1.70 lbs. 1.70 hrs. 1.70 hrs. Standard Price (Rate) $ 1.80 per lb. $12.00 per hr. $ 1.10 per hr. Standard Unit Cost $ 3.06 20.40 1.87 2.30 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 190,000 348,200 $ 661,580 235,000 $ 3,901,000 $ 370,000 $ 415,000 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

34820 U 45360 U 80180 U 1081000 U Answer (1) Mateial Price Variance (AQ*AP)-(AQ*SP) Matrial Quanity Varaince (AQ*SP)-(SQ*SP) Direct Material Spending Variance - 2 Labor rate Variance (AH*AR-AH*SR) labor Efficiency Varaince (AH*SR)-(SH*SR) Direct Labor spending Varaince 3 Overhead Rate Variance (AH*AR)-(AH*SR) Overhead Efficiency Varaince (AH*SR)-(SH*SR) Variable overhead Spending Variance 1056000 F 25000 U 111500 U 96800 F 14700U

1.80 Per foot 1.7 feet 323000 feet 190000 Units 348200 feet 348200 feet 1.90 Per foot Direct Material Standard Price SP Standard quantity Per unit Standard Quantity for Actual Output SQ Actual Output Actual Quantity Purchased AQP Actual Quanity Used AQ Actual Price of Material AP Direct Labor Standard Rate SR 1 Standard hours per unit Standard Hours for Actual output L SH Actual Output Actual hours Worked Actual Rate AR Varaible OH Standard Rate SR Standard hours per unit Standard Hours for Actual output SH Actual Output Actual hours Worked AH Actual rate 12 Per hour 1.7 hours 323000 Hours 190000 Units 1235000 hours 16.60 Per hour AH 1.10 Per hour 1.70 hours 323000 Hours 190000 Units 235000 hours 1.57 Per hour AR