Question

Requirement: 1 Majer Corporation makes a product with the following standard costs: Standard Quantity or Hours...

Requirement: 1

Majer Corporation makes a product with the following standard costs:

Standard Quantity
or Hours
Standard Price or
Rate
Standard Cost Per Unit
Direct materials 6.4 ounces $ 3.00 per ounce $ 19.20
Direct labor 0.7 hours $ 19.00 per hour $ 13.30
Variable overhead 0.7 hours $ 3.00 per hour $ 2.10

The company reported the following results concerning this product in February.

Originally budgeted output 4,700 units
Actual output 5,200 units
Raw materials used in production 30,400 ounces
Actual direct labor-hours 1,820 hours
Purchases of raw materials 32,800 ounces
Actual price of raw materials $ 87.10 per ounce
Actual direct labor rate $ 77.60 per hour
Actual variable overhead rate $ 6.00 per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for February is:

Requirement: 2

Majer Corporation makes a product with the following standard costs:

Standard Quantity
or Hours
Standard Price or
Rate
Standard Cost Per Unit
Direct materials 3.0 ounces $ 5.50 per ounce $ 16.50
Direct labor 0.8 hours $ 11.50 per hour $ 9.20
Variable overhead 0.8 hours $ 4.00 per hour $ 3.20

The company reported the following results concerning this product in February.

Originally budgeted output 6,000 units
Actual output 5,800 units
Raw materials used in production 17,400 ounces
Actual direct labor-hours 4,840 hours
Purchases of raw materials 19,000 ounces
Actual price of raw materials $ 5.25 per ounce
Actual direct labor rate $ 13.20 per hour
Actual variable overhead rate $ 4.70 per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for February is:

Requirement: 3

Majer Corporation makes a product with the following standard costs:

Standard Quantity
or Hours
Standard Price or
Rate
Standard Cost Per Unit
Direct materials 6.1 ounces $ 2.00 per ounce $ 12.20
Direct labor 0.7 hours $ 12.00 per hour $ 8.40
Variable overhead 0.7 hours $ 2.00 per hour $ 1.40

The company reported the following results concerning this product in February.

Originally budgeted output 5,400 units
Actual output 5,700 units
Raw materials used in production 33,100 ounces
Actual direct labor-hours 2,030 hours
Purchases of raw materials 35,500 ounces
Actual price of raw materials $ 17.10 per ounce
Actual direct labor rate $ 7.60 per hour
Actual variable overhead rate $ 5.30 per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead efficiency variance for February is:

Homework Answers

Answer #1
1
Materials quantity variance = Standard price*(Actual quantity used-Standard quantity)
Materials quantity variance = 3*(30400-5200*6.4)= $8640 F
2
Materials price variance for February = Actual quantity purchased*(Actual price-Standard price)
Materials price variance for February = 19000*(5.25-5.50)= $4750 F
3
Variable overhead efficiency variance = Standard rate*(Actual hours-Standard hours)
Variable overhead efficiency variance = 2.00*(2030-5700*0.7)= $3920 F
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