8-581
412. Stewart Corporation makes a product with the following standard costs:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Per Unit
Direct materials 9.3 pounds $8.00 per pound $74.40
Direct labor 0.4 hours $19.00 per hour $7.60
Variable overhead 0.4 hours $7.00 per hour $2.80
The company reported the following results concerning this product in August.
Originally budgeted output 3,000 units
Actual output 3,100 units
Raw materials used in production 30,370 pounds
Purchases of raw materials 33,900 pounds
Actual direct labor-hours 1,340 hours
Actual cost of raw materials purchases $264,420
Actual direct labor cost $27,872
Actual variable overhead cost $8,844
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.
8-584
413. Bronfenbrenner Co. uses a standard cost system for its single product in which variable
overhead is applied on the basis of direct labor hours. The following information is given:
Standard costs per unit:
Raw materials (1.5 grams × $16 per gram) $24.00
Direct labor (0.75 hours × $8 per hour) $6.00
Variable overhead (0.75 hours × $3 per hour) $2.25
Actual experience for current year:
Units produced 22,400 units
Purchases of raw materials (21,000 grams × $17 per gram) $357,000
Raw materials used 33,400 grams
Direct labor (16,750 hours × $8 per hour) $134,000
Variable overhead cost incurred $48,575
Required:
Compute the following variances for raw materials, direct labor, and variable overhead, assuming
that the price variance for materials is recognized at point of purchase:
a. Direct materials price variance.
b. Direct materials quantity variance.
c. Labor rate variance.
d. Labor efficiency variance.
e. Variable overhead rate variance.
f. Variable overhead efficiency variance.
8-587
414. The following direct labor standards have been established for product S57S:
Standard direct labor-hours 1.5 hours per unit of S57S
Standard direct labor wage rate $14.70 per hour
The following data pertain to last month’s operations:
Actual output of product S57S 720 units
Actual direct labor-hours worked 1,000 hours
Actual direct labor wages paid $14,800
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
415. The standards for product F88W specify 3.4 direct labor-hours per unit at $13.00 per
direct labor-hour. Last month 800 units of product F88W were produced using 2,500 direct labor–
hours at a total direct labor wage cost of $30,500.
Required:
a. What was the labor rate variance for the month?
b. What was the labor efficiency variance for the month?
8-589
416. The following labor standards have been established for a particular product:
Standard labor hours per unit of output 2.8 hours
Standard labor rate $11.50 per hour
The following data pertain to operations concerning the product for the last month:
Actual hours worked 6,900 hours
Actual total labor cost $80,385
Actual output 2,300 units
Required:
a. What is the labor rate variance for the month?
b. What is the labor efficiency variance for the month?
417. Shawl Corporation’s variable overhead is applied on the basis of direct labor-hours. The
standard cost card for product F02E specifies 5.5 direct labor-hours per unit of F02E. The
standard variable overhead rate is $6.80 per direct labor-hour. During the most recent month,
1,560 units of product F02E were made and 8,700 direct labor-hours were worked.
The actual variable overhead incurred was $52,635.
Required:
a. What was the variable overhead rate variance for the month?
b. What was the variable overhead efficiency variance for the month?
418. Vath Corporation, which makes landing gears, has provided the following data for a
recent month:
Budgeted production 7,600 gears
Standard machine-hours per gear 2.3 machine-hours
Budgeted supplies cost $3.00 per machine-hour
Actual production 8,000 gears
Actual machine-hours 18,430 machine-hours
Actual supplies cost (total) $52,029
Required:
Determine the rate and efficiency variances for the variable overhead item supplies and indicate
whether those variables are favorable or unfavorable. Show your work!
419. Deschamp Corporation’s variable overhead is applied on the basis of direct labor-hours.
The company has established the following variable overhead standards for product O28H:
Standard direct labor-hours 2.5 hours per unit of O28H
Standard variable overhead rate $7.70 per hour
The following data pertain to the most recent month’s operations during which 2,160 units of
product O28H were made:
Actual direct labor-hours worked 5,200
Actual variable overhead incurred $44,980
Required:
a. What was the variable overhead rate variance for the month?
b. What was the variable overhead efficiency variance for the month?
8-594
420. The following standards for variable overhead have been established for a company that
makes only one product:
Standard hours per unit of output 6.9 hours
Standard variable overhead rate $15.80 per hour
The following data pertain to operations for the last month:
Actual hours 6,100 hours
Actual total variable overhead cost $97,600
Actual output 800 units
Required:
a. What is the variable overhead rate variance for the month?
b. What is the variable overhead efficiency variance for the month?
421. Pearle Corporation makes automotive engines. For the most recent month, budgeted
production was 3,300 engines. The standard power cost is $9.20 per machine-hour. The
company’s standards indicate that each engine requires 2.1 machine-hours. Actual production
was 3,400 engines. Actual machine-hours were 7,160 machine-hours. Actual power cost totaled
$61,815.
Required:
Determine the rate and efficiency variances for the variable overhead item power cost and
indicate whether those variances are unfavorable or favorable. Show your work!
8-597
422. The following data have been provided by Leason Corporation:
Budgeted production 7,300 units
Standard machine-hours per unit 9.0 machine-hours
Standard lubricants $1.60 per machine-hour
Standard supplies $1.30 per machine-hour
Actual production 7,500 units
Actual machine-hours 67,570 machine-hours
Actual lubricants (total) $100,973
Actual supplies (total) $95,651
Required:
Compute the variable overhead rate variances for lubricants and for supplies. Indicate whether
each of the variances is favorable (F) or unfavorable (U). Show your work!
423. The following data for March have been provided by Fickling Corporation, a producer of
precision drills for oil exploration:
Budgeted production 5,700 drills
Standard machine-hours per drill 1.8 machine-hours
Standard indirect labor $1.30 per machine-hour
Standard power $1.20 per machine-hour
Actual production 5,800 drills
Actual machine-hours 10,580 machine-hours
Actual indirect labor $13,024
Actual power $13,107
Required:
Compute the variable overhead rate variances for indirect labor and for power for March.
Indicate whether each of the variances is favorable (F) or unfavorable (U). Show your work!
