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411.
Kowaleski Corporation makes a product with the following standard costs:
Standard Quantity or Hours
Standard Price or Rate
Direct materials
2.8 kilos
$4.00 per kilo
Direct labor
0.1 hours
$21.00 per hour
Variable overhead
0.1 hours
$4.00 per hour
In June the company produced 9,100 units using 27,010 kilos of the direct material and
930 direct labor-hours. During the month the company purchased 30,600 kilos of the direct
material at a price of $3.70 per kilo. The actual direct labor rate was $19.90 per hour and
the actual variable overhead rate was $4.20 per hour. The materials price variance is
computed 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.
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412.
Stewart Corporation makes a product with the following standard costs:
Standard
Price or
Rate
Standard
Cost Per
Unit
Direct
materials
$8.00 per
pound
$74.40
Direct
labor
$19.00
per hour
$7.60
Variable
overhead
$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.
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d. Compute the labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
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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.
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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?
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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?
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