Question

Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 9.20 liters $ 8.80 per liter Direct labor 0.50 hours $ 30.70 per hour Variable manufacturing overhead 0.50 hours $ 7.70 per hour The company has reported the following actual results for the product for September: Actual output 11,400 units Raw materials purchased 105,800 liters Actual cost of raw materials purchased $ 949,500 Raw materials used in production 104,900 liters Actual direct labor-hours 5,240 hours Actual direct labor cost $ 170,302 Actual variable overhead cost $ 36,414

Answer 1

Answer-

1-Material price variance: Actual qty purchased (Std price - Actual price
Raw materials price variance=105,800*(8.80-8.97)=				17986	U
Actual Price= $949,500/ 105,800= $8.97
2-Material qty variance: Std price (Std quantity-Actual quantity) Raw materials quantity variance=8.80*(104,900-11,400*9.20)=				176	U
3- Labor rate variance: Actual hours (Std rate-Actual rate)
Labor rate variance=5,240*(30.7-32.5)= Actual Rate= $170,302/ 5,240 hours= 32.50				9,432	U
4-
Labor efficiency variance=30.7*(5,240-11,400*0.5)=				14,122	F
5-
Variable overhead rate variance=5,240*(6.95-7.7)=				3930	F
6-
Variable overhead efficiency variance=7.7*(5,240-11,400*0.5)=				3542	F