Question

Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping...

Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows: Direct material of 6.00 yards at $5.00 per yard Direct labor of 3.00 hours at $20.00 per hour Overhead applied per sleeping bag at $17.00 In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $5.70 per yard. The labor used was 11,700 hours at an average rate of $17.50 per hour. The actual overhead spending was $96,200. Determine the total materials variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.

Bowie Sporting Goods manufactures sleeping bags. The manufacturing standards per sleeping bag, based on 5,000 sleeping bags per month, are as follows:

Direct material of 4.00 yards at $5.00 per yard

Direct labor of 2.50 hours at $18.00 per hour

Overhead applied per sleeping bag at $19.00

In the month of April, the company actually produced 5,200 sleeping bags using 27,300 yards of material at a cost of $5.30 per yard. The labor used was 11,700 hours at an average rate of $16.50 per hour. The actual overhead spending was $96,200.

Determine the labor rate variance and round to the nearest whole dollar. Enter a favorable variance as a negative number. Enter an unfavorable variance as a positive number.

Homework Answers

Answer #1

Solution 1 .

Calculation of Total Material Variance :

Total Material Variance = Actual Material Cost -Standard Material Cost

Here ,

Standard Material Cost = Standard Qty * Standard Rate

= (5000 bags * 6 yards) *($5 per yard)

=30,000 * $5

= $150,000

Actual Material Cost = Actual Qty * Actual Rate

= (27,300 Yard) *($5.70 per yard)

=$155,610

Therefore,

Total Material Variance = $155,610 - $150,000

= 5,610 (Unfavorable)

Solution 2.

Calculation of Labor Rate Variance:

Labor Rate Variance = ( Actual Rate - Standard Rate) * Actual Hours Worked

Here,

Actual Rate = $16.5 per Hr

Standard Rate = $18.0 per hr

Actual Hours = 11,700 Hrs

Labor Rate Variance = ( $16.5 - $18.0) * 11,700 Hr

= -$1.5 * 11,700 Hr

= - $17,550 (Favorable)

  

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