Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Quantity 1.80 lbs 1.80 hrs Standard Price (Rate) 1.90 per lb. $ 11.00 per hr. 1.10 per hr. Standard Unit Cost 3.42 19.80 Direct materials (clay) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($396,000.00 180,000.00 units) 1.80 hrs. 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 185,000 338.200 $ 676.400 230,000 $3,680,000 $ 360,000 $ 380,000 Direct labor cost Variable overhead cost Fixed overhead cost 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 2. Calculate the direct labor rate, efficiency, 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 Labor Rate Variance Direct Labor Efficiency Variance Direct Labor Spending Variance

Answer 1

Standard Rate Actual Rate Qty. Unit cost Qty. Unit cost 2 Direct materials Direct labour 3,33,000 3,33,000 1.9 6,32,700 11 36,63,000 3,38,200 2,30,000 6,76,400 36,80,000 16 Direct materials price variance = (SP-AP)*AQ -33,820 (U) Direct labour rate variance = (SR-AR)*AH - 11,50,000 (0) Direct materials quantity variance = (SQ-AQ) *SP -9,880 (0) Direct labour efficiency variance = (SH-AH)*SR 11,33,000 (F) Direct materials spending variance = Standard cost - Actual cost -43,700 (0) Direct labour spending variance = Standard labour cost - Actual labour cost -17,000 U