Question

# They allocate (apply) OH based on # of DL hours.   Following are this year's cost and...

 They allocate (apply) OH based on # of DL hours. Following are this year's cost and standards data; assumes 52 weeks per year. Standards (for a planned level of production of 2,100 units per month) Direct Materials: Yards per costume 12.00 yards Price per yard \$           26.50 average Direct Labor: D.L. Hours per costume 60.00 hours D.L. Rate per hour \$           45.00 average Variable MOH standard rate per direct labor hour \$             4.85 per D.L. hour Fixed MOH standard rate per direct labor hour \$           10.32 per D.L. hour Total Budgeted Fixed MOH (for 1 month) \$    1,300,000 Actual cost and data from the current month: Actual number of yards of materials purchased 28,000 Actual cost of materials purchased \$       800,000 \$        28.57 per yd Actual number of yards used in production 26,350 Actual number of costumes produced 2,200 Actual direct labor hours 134,500 Actual direct labor cost \$    5,112,000 \$        38.01 per hr Actual variable MOH (in total) \$       673,000 Actual fixed MOH (in total) \$    1,458,000

find the direct material variances, direct labor vairaince, variable MOH varaince, fixed MOH variance.

Direct material variance = actual price-standard price) * actual quantity

= (28.57-26.50) * 26350

= 2.07 * 26350

= \$54,544.5 unfavourable

Direct labour varience = (standard rate - actual rate) * actual hours

= (45-38.01) * 134500

= 6.99 * 134500

= \$ 940,155 favourable

Variable MOH variance = actual MOH - (actual hours * standard rate)

= 673,000 - (134,500 * 4.85)

= 673,000 - 652,325

=\$ 20,675

fixed MOH variance = Actual costs - Budgeted costs

= 1,458,000 - 1,300,000

= \$158,000

thank you

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