Question

17 A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.

Standard hours per unit of output	3.90	machine-hours
Standard variable overhead rate	$11.25	per machine-hour

The following data pertain to operations for the last month:

Actual hours	8,800	machine-hours
Actual total variable manufacturing overhead cost	$95,850
Actual output	2,200	units

What is the variable overhead efficiency variance for the month?

$2,692 U

$7,513 F

$2,475 U

$7,513 U

18 The following materials standards have been established for a particular product:

Standard quantity per unit of output	4.9	grams
Standard price	$12.00	per grams

The following data pertain to operations concerning the product for the last month:

Actual materials purchased	3,800	grams
Actual cost of materials purchased	$ 44,270
Actual materials used in production	3,100	grams
Actual output	570	units

The direct materials purchases variance is computed when the materials are purchased.

Required:
a.	What is the materials price variance for the month? (Input the amount as a positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

Materials Price Variance_______________

b.	What is the materials quantity variance for the month? (Input the amount a as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)

Materials quantity variance____________

Answer 1

17) Variable Overhead Efficiency Variance :-

= Standard Overhead Rate * (Actual Hours - Standard Hours)

= $11.25 * (8800 H - (2200*$3.90))

= $11.25 * (8800 - 8580)

= $11.25 * 220 H

= $2475 U

18)a Materials Price Variance :-

= Actual Quantity * (Standard Price - Actual Price)

= 3100 g * ($12 - $11.65)

= 1085 F

b) Material Quantity Variance :-

= Standard Price * (Standard Quantity - Actual Quantity)

= $12 * ((570*4.9) - 3100)

= $12 * (2793 - 3100)

= $12 * 307

= $3684 U