Question

Question 1 is Part A,B,c, and D

A.

Oliver Enterprises has collected the following data for one of its​ products:

Direct materials standard ​(7 pounds per unit​ @ $0.56​/lb.)	$3.92 per finished good
Direct materials flexible budget variance−unfavorable	$12,000
Actual Direct Materials Used​ (AQU)	35,000 pounds
Actual finished goods produced	21,000 units

What is the total actual cost of the direct materials​ used?

A.$137,200

B.$82,320

C.$94,320

D.$70,320

B. The following information describes a​ company's usage of direct labor in a recent​ period:

Actual direct labor hours used	$36,000
Actual rate per hour	$24.00
Standard rate per hour	$12.50
Standard hours for units produced	33,500

How much is the direct labor rate​ variance?

A.$414,000 favorable

B. $385,250 unfavorable

C. $414,000 unfavorable

D. $385,250 favorable

C. The actual cost of direct labor per hour is $15.75. Two and one half standard direct labor hours are allowed per unit of finished goods. During the current​ period, 3,500 units were produced using 8,450 direct labor hours. The direct labor efficiency variance is $2,600 favorable. Calculate the standard direct labor rate per hour.

A. $0.74

B.$8.67

C. $15.75

D. $3.37

D.

Speaker City designs and manufactures high−end home theater speakers. Speaker City uses a standard variable overhead rate of 4.5 hours per unit at a cost of $12.00 per hour. Data for the month of June shows that Speaker City produce 600 units and recorded actual variable overhead costs of $46,000.

What is the total variable overhead variance for the month of​June?

A. $13,600 unfavorable

B. $38,800 favorable

C. $13,600 favorable

D. $38,800 unfavorable

Answer 1

A.

Direct material flexible budget variance = Actual results - Flexible budget

-$12,000 = Actual results - $82,320 (21,000*$3.92)

Actual results = $82,320-12,000 = $70,320

The total actual cost of direct material used is $70,320

Hence option D is correct.

B.

Direct labor rate variance = Actual hours*Standard rate - Actual hours*Actual rate

Direct labor rate variance = 36,000*$12.50 - 36,000*$24

Direct labor rate variance = $450,000 - 864,000 = $414,000 Unfavorable

Hence option C is correct.

C.

Direct labor efficiency variance = (Standard hours - Actual hours) * Standard rate

$2,600 = (3,500*2.5 - 8,450) * Standard rate

$2,600 = 300 * Standard rate

Standard rate = $2,600 / 300 = $8.67 per hour

Hence option B is correct.

D.

Total variable overhead variance = Actual variable overhead cost - (Actual output * Standard rate per output)

Total variable overhead variance = $46,000 - (600*4.5*$12)

Total variable overhead variance = $46,000 - $32,400= $13,600 Unfavorable

Hence option A is correct.