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 | 2.10 | pounds | $ | 16.30 | per pound | $ | 34.23 |
| Direct labor | 1.00 | hours | $ | 15.70 | per hour | $ | 15.70 |
| Variable manufacturing overhead | 1.00 | hours | $ | 9.20 | per hour | $ | 9.20 |
| Total standard cost per unit | $ | 59.13 | |||||
| Total | Variances Reported | |||||||
| Standard Cost* |
Price or Rate |
Quantity or Efficiency |
||||||
| Direct materials | $ | 547,680 | $ | 10,324 | F | $ | 32,600 | U |
| Direct labor | $ | 251,200 | $ | 3,400 | U | $ | 15,700 | U |
| Variable manufacturing overhead | $ | 147,200 | $ | 4,800 | 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?
1)Units produced = Standard cost of direct material /standard direct material cost per unit
= 547680/34.23
= 16000 Units
2)Material quantity variance =SR[AQ-SQ]
32600= 16.30 [ AQ- (16000* 2.10)]
32600/16.30 = [AQ- 33600]
2000+33600 =AQ
Actual quantity purchased and used : 35600
3)Material rate variance = AQ[AR-SR]
-10324 =35600[AR-16.30]
-10324/35600= AR-16.30
-.29 +16.30 =AR
Actual cost per pound = $ 16.01 per pound
4)Labor efficiency variance = SR[AH-SH]
15700 = 15.57 [AH-(16000*1)]
15700/15.7 =AH-16000
Actual hours = 1000+16000= 17000 hours
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