You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations.
Standard Cost Card | ||
Direct materials (8 pounds at $5 per pound) | $40.00 | |
Direct labor (0.70 hours at $10) | 7.00 | |
Variable overhead (0.70 hours at $3 per hour) | 2.10 | |
Fixed overhead (0.70 hours at $7 per hour) | 4.90 | |
$54.00 |
The following is a variance report for the most recent period of
operations.
Variances |
||||||||
Costs |
Total Standard Cost |
Price |
Quantity |
|||||
Direct materials | $412,000 | $8,434 | F | $9,700 | U | |||
Direct labor | 72,100 | 4,704 | U | 6,300 | U |
How many units were produced during the period?
Number of units |
eTextbook and Media
How many pounds of raw materials were purchased and used during the period?
Raw material | pounds |
eTextbook and Media
What was the actual cost per pound of raw materials? (Round answer to 2 decimal places, e.g. 1.25.)
Actual cost per pound of raw materials |
$ |
/lb |
eTextbook and Media
How many actual direct labor hours were worked during the period?
Actual direct labor hours | hours |
eTextbook and Media
What was the actual rate paid per direct labor hour? (Round answer to 2 decimal places, e.g. 1.25.)
Actual rate paid per direct labor hour |
$ |
/hr |
(a). How many units were produced during the period?
Answer:-
Units produced
= Total standard Cost / standard Cost per unit
= $412,000 / $40
= 10,300 units.
(b) AQ
= [(SQ X SP) Quantity variance] ÷ SP
AQ = ($412,000 + $9,700) ÷ $5.00 per lb = 84,340 pounds
(c) AP
= [(AQ X SP) Price variance] ÷ AQ
AP = [(84,340 X $5) - $8,434] = $413,266 ÷ 84,340 lb = $4.9/lb
(d) AH
= [(SH X SR) Quantity variance] ÷ SR
AH = ($72,100 + $6,300) ÷ $10.00/hr = 7,840 hours
(e) AR
= [(AH X SR) Price variance] ÷ AH
AP = [(7,840 X $10) + $4,704] = $83,104 ÷ 7,840 hr = $10.60/hr
Please, upvote, if your satisfied with my answers. Thank you.
Get Answers For Free
Most questions answered within 1 hours.