Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:

Inputs	(1) Standard Quantity or Hours		(2) Standard Price or Rate			Standard Cost (1) × (2)
Direct materials	2.20	pounds	$	16.30	per pound	$	35.86
Direct labor	1.00	hours	$	15.70	per hour	$	15.70
Variable manufacturing overhead	1.00	hours	$	9.40	per hour	$	9.40
Total standard cost per unit						$	60.96

	Total		Variances Reported
	Standard Cost*		Price or Rate			Quantity or Efficiency
Direct materials	$	681,340	$	12,702	F	$	32,600	U
Direct labor	$	298,300	$	4,000	U	$	15,700	U
Variable manufacturing overhead	$	178,600	$	4,100	F	$	?†	U

*Applied to Work in Process during the period.

The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.

Required:

1. How many units were produced last period? How many pounds of direct material were purchased and used in production?

2. What was the actual cost per pound of material? (Round your answer to 2 decimal places.)

3. How many actual direct labor-hours were worked during the period?

4. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)

5. How much actual variable manufacturing overhead cost was incurred during the period?

Answer 1

Answer 1.

Total Standard Materials Cost = Standard Materials Cost per unit * Units produced
$681,340 = $35.86 * Units produced
Units produced = 19,000

Materials Quantity Variance = Actual Materials used * Standard Materials Cost per pound - Total Standard Materials Cost
$32,600 = Actual Materials used * $16.30 - $681,340
$713,940 = Actual Materials used * $16.30
Actual Materials used = 43,800 pounds

Answer 2.

Materials Price Variance = Actual Materials used * (Actual Materials Cost per pound - Standard Materials Cost per pound)
-$12,702 = 43,800 * (Actual Materials Cost per pound - $16.30)
-$0.29 = Actual Materials Cost per pound - $16.30
Actual Materials Cost per pound = $16.01

Answer 3.

Labor Efficiency Variance = Actual Labor hours worked * Standard Labor Rate per hour - Total Standard Labor Cost
$15,700 = Actual Labor hours worked * $15.70 - $298,300
$314,000 = Actual Labor hours worked * $15.70
Actual Labor hours worked = 20,000

Answer 4.

Labor RateVariance = Actual labor hours worked * (Actual Labor Rate per hour - Standard Labor Rate per hour)
$4,000 = 20,000 * (Actual Labor Rate per hour - $15.70)
$0.20 = Actual Labor Rate per hour - $15.70
Actual Labor Rate per hour = $15.90

Answer 5.

Variable Overhead Rate Variance = Actual Variable Overhead Cost - Actual labor hours worked * Standard Variable Overhead per hour
-$4,100 = Actual Variable Overhead Cost - 20,000 * $9.40
-$4,100 = Actual Variable Overhead Cost - $188,000
Actual Variable Overhead Cost = $183,900