Question

Kropf Inc. has provided the following data concerning one of the products in its standard cost...

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 7.80 liters $ 7.40 per liter
Direct labor 0.40 hours $ 25.70 per hour
Variable manufacturing overhead 0.40 hours $ 6.30 per hour

The company has reported the following actual results for the product for September:

Actual output 10,000 units
Raw materials purchased 78,500 liters
Actual cost of raw materials purchased $ 586,500
Raw materials used in production 78,020 liters
Actual direct labor-hours 3,800 hours
Actual direct labor cost $ 100,302
Actual variable overhead cost $ 20,314

Required:

a. Compute the materials price variance for September.

b. Compute the materials quantity variance for September.

c. Compute the labor rate variance for September.

d. Compute the labor efficiency variance for September.

e. Compute the variable overhead rate variance for September.

f. Compute the variable overhead efficiency variance for September.

Homework Answers

Answer #1
in $
Ans 1 Materials Price Variance A $5600 Unfavorable
(AQ*AP)-(AQ*SP)
586500-(78500*7.4)
ans 2 Materials Quantity Variance B 148 Unfavorable
SP*(AQ-SQ allowed)
7.4*(78020-(10000*7.8))
ans 3
Direct Labor Rate Variance C 2642 Unfavorable
(AH*AR)-(AH*SR)
100302-(3800*25.7)
labor efficiency variance 5140 Favorable
SR*(AH-ShH allowed)
25.7*(3800-(10000*.4)) -5140
ans 5
variable overhead rate variance 3626 Favorable
(AH*AVR)-(AH*SVR)
20314-(3800*6.3) -3626
variable overhead efficiency variance 1260 Favorable
SR*(AH-ShH allowed)
6.3*(3800-(10000*.4)) -1260
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