Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:

Inputs	(1) Standard Quantity or Hours		(2) Standard Price or Rate			Standard Cost (1) × (2)
Direct materials	2.20	pounds	$	16.60	per pound	$	36.52
Direct labor	1.00	hours	$	15.10	per hour	$	15.10
Variable manufacturing overhead	1.00	hours	$	9.60	per hour	$	9.60
Total standard cost per unit						$	61.22

	Total		Variances Reported
	Standard Cost*		Price or Rate			Quantity or Efficiency
Direct materials	$	693,880	$	12,702	F	$	33,200	U
Direct labor	$	286,900	$	4,000	U	$	15,100	U
Variable manufacturing overhead	$	182,400	$	5,000	F	$	?†	U

*Applied to Work in Process during the period.

The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.

Required:

1. How many units were produced last period?

2. How many pounds of direct material were purchased and used in production?

3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.)

4. How many actual direct labor-hours were worked during the period?

5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)

6. How much actual variable manufacturing overhead cost was incurred during the period?

Answer 1

1)	Total Units Produced			19,000
Working:
Total Units produced			=	Total Standard Cost/Standard Cost per unit
So
				Total Standard cost	Standard Cost per Unit	Total Units produced
Direct Materials				$                  6,93,880	$                                36.52	19,000
Direct Labor				$                  2,86,900	$                                15.10	19,000
Variable Manufacturing Overhead				$                  1,82,400	$                                  9.60	19,000
2)	Pounds of direct material purchased and used in production				43,800
Working:
Direct Material Quantity variance				=	(Standard Quantity - Actual Quantity)*Standard Price
		$                33,200	U	=	(41800-Actual Quantity)*16.60
		$                   2,000	U	=	41800-Actual Quantity
		Actual Quantity		=	41800+2000
		Actual Quantity		=	43,800
Working:
Standard quantity of Material			=	Total Units produced x Standard quantity per unit
			=	19,000	x 2.20 pounsds
			=	41,800
3)	Actual cost per pound of material			$ 16.31
Working:
Material Price Variance			=	(Standard Price-Actual Price)*Actual Quantity
	$              12,702	F	=	(16.60-Actual Price)*43800
	0.29	F	=	16.60-Actual Price
	Actual Price		=	16.60-0.29
	Actual Price		=	$                        16.31
4)	Actual direct labor-hours were worked during the period				20,000 hours
Working:
Direct Labor efficiency Variance			=	(Standard Labor hours -Actual labor hours)*Standard Labor rate
	15100	U	=	(19000-Acual labor hours)*15.10
	1000	U	=	19000-Acual labor hours
Actual Labor hours			=	19000+1000
Actual Labor hours			=	20,000
Working:
Standard direct labor hours			=	Actual units produced x Standard labor hours per unit
			=	19,000	x 1.00
			=	19,000