The following standard costs were developed for one of the products of Larry Corporation:

STANDARD COST CARD PER UNIT
   
Materials: 4 feet ´ $14 per foot $ 56.00
Direct labor: 8 hours ´ $10 per hour 80.00
Variable overhead: 8 hours ´ $8 per hour 64.00
Fixed overhead: 8 hours ´ $12 per hour   96.00
Total standard cost per unit $296.00

The following information is available regarding the company’s operations for the period:

Units produced: 11,000
Materials purchased: 52,000 feet @ $13.70 per foot
Materials used: 40,000 feet
Direct labor: 84,000 hours costing $840,000
   
Manufacturing overhead incurred:  
    Variable $756,000
    Fixed $1,000,000

Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours.

Required:

a. Calculate the materials price variance.
b. Calculate the materials usage variance.
c. Calculate the direct labor rate variance.
d. Calculate the direct labor efficiency variance.
e. Calculate the variable manufacturing overhead spending variance.
f. Calculate the variable manufacturing overhead efficiency variance.
g. Calculate the fixed manufacturing overhead spending variance.
h. Calculate the fixed manufacturing overhead volume variance.

ANS: 

a. $15,600 F 52,000 ´ ($13.70 – $14.00)
b. $56,000 F (40,000 ´ $14) – (11,000 ´ 4 ´ $14)
c. $-0- $840,000 – (84,000 ´ $10)
d. $40,000 F (84,000 ´ $10) – (11,000 ´ 8 ´ $10)
e. $84,000 U $756,000 – (84,000 ´ $8)
f. $32,000 F (84,000 ´ $8) – (11,000 ´ 8 ´ $8)
g. $40,000 U ($1,000,000 – $960,000)
h. $96,000 F $960,000 – (11,000 ´ 8 ´ $12)

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