221
222
231) Lido Company’s standard and actual costs per unit for the most recent period, during which
500 units were actually produced, are given below:
Standard
Actual
Materials:
Standard: 2 feet × $1.50 per foot
$3.00
Actual: 1.9 feet × $1.60 per foot
$3.04
Direct labor:
Standard: 1.5 hours × $6.00 per hour
9.00
Actual: 1.7 hours × $6.30 per hour
10.71
Variable manufacturing overhead:
Standard: 1.5 hours × $3.40 per hour
5.10
Actual: 1.7 hours × $3.00 per hour
_____
5.10
Total unit cost
$17.10
$18.85
All of the materials purchased during the period were used in production during the period.
Required:
From the foregoing information, compute the following variances. Indicate whether the variance is
favorable (F) or unfavorable (U):
a. Material price variance.
b. Material quantity variance.
c. Labor rate variance.
d. Labor efficiency variance.
e. Variable overhead rate variance.
f. Variable overhead efficiency variance.
224
232) Reagen Corporation makes a product with the following standard costs:
Standard Quantity
or Hours
Standard Price
or Rate
Direct materials
3.7 liters
$5.00 per liter
Direct labor
0.3 hours
$21.00 per hour
Variable overhead
0.3 hours
$7.00 per hour
The company reported the following results concerning this product in December.
7,700
units
26,880
liters
2,270
hours
28,400
liters
$4.90
per liter
$21.50
per hour
$6.40
per hour
The materials price variance is recognized when materials are purchased. Variable overhead is
applied on the basis of direct labor-hours.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
226
233) Galeazzi Corporation makes a product with the following standard costs:
Standard Quantity
or Hours
Standard Price
or Rate
Direct materials
3.1 pounds
$6.00 per pound
Direct labor
0.8 hours
$18.00 per hour
Variable overhead
0.8 hours
$6.00 per hour
In October the company produced 3,000 units using
8,380 pounds of the direct material and 2,610 direct labor-hours. During the month, the company
purchased 9,500 pounds of the direct material at a total cost of $55,100. The actual direct labor cost
for the month was $48,546 and the actual variable overhead cost was $16,965. The company
applies variable overhead on the basis of direct labor-hours. The direct materials purchases
variance is computed when the materials are purchased.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
234) Motts Inc. has a standard cost system in which the standard direct labor for a particular
product is 0.50 hours at the standard rate of $21.00 per hour. The company has reported the
following actual results for the product for October:
Actual output
2,300
units
Actual direct labor-hours
1,050
hours
Actual direct labor cost
$22,995
Required:
a. Compute the labor rate variance for October.
b. Compute the labor efficiency variance for October.
235) The following direct labor standards have been established for product O64L:
Standard direct labor-hours
7.2
hours per unit of O64L
Standard direct labor wage rate
$12.80
per hour
The following data pertain to last month’s operations:
Actual output of product O64L
900
units
Actual direct labor-hours worked
6,600
hours
Actual direct labor wages paid
$78,540
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
236) Boldrin Inc. has a standard cost system. The standards for direct labor for one of its products
specify 0.20 hours per unit at $18.70 per hour. The company has reported the following actual
results for the product for August:
Actual output
1,300
units
Actual direct labor-hours
250
hours
Actual direct labor rate
$18.50
per hour
Required:
a. Compute the labor rate variance for August.
b. Compute the labor efficiency variance for August.
231
237) The following labor standards have been established for a particular product:
Standard labor hours per unit of output
3
hours
Standard labor rate
$
12
per hour
–
The following data pertain to operations concerning the product for the last month:
Actual hours worked
6,700
hours
Actual total labor cost
$
80,200
Actual output
2,200
units
–
Required:
a. What is the labor rate variance for the month?
b. What is the labor efficiency variance for the month?
238) The standards for product G78V specify 4.1 direct labor-hours per unit at $12.10 per direct
labor-hour. Last month 1,600 units of product G78V were produced using 6,600 direct labor-hours
at a total direct labor wage cost of $77,220.
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?