Question

You have been given the following information about the production of Usher Co., and are asked to provide the plant manager with information for a meeting with the vice president of operations. Standard Cost Card Direct materials (5 pounds at $5 per pound) $25.00 Direct labor (0.90 hours at $10) 9.00 Variable overhead (0.90 hours at $3 per hour) 2.70 Fixed overhead (0.90 hours at $8 per hour) 7.20 $43.90 The following is a variance report for the most recent period of operations. Variances Costs Total Standard Cost Price Quantity Direct materials $407,500 $8,342 F $9,600 U Direct labor 146,700 6,132 U 6,600 U How many units were produced during the period? Number of units eTextbook and Media How many pounds of raw materials were purchased and used during the period? Raw material pounds eTextbook and Media Assistance Used What was the actual cost per pound of raw materials? (Round answer to 2 decimal places, e.g. 1.25.) Actual cost per pound of raw materials $ /lb eTextbook and Media How many actual direct labor hours were worked during the period? Actual direct labor hours hours eTextbook and Media Assistance Used What was the actual rate paid per direct labor hour? (Round answer to 2 decimal places, e.g. 1.25.) Actual rate paid per direct labor hour $ /hr

Answer 1

1) Number of unit produced = 407500/25 = 16300 Units

2) Material quantity variance = (SQ-AQ)SP

-9600 = (16300*5*5-5X)

5X = 407500+9600

X(actual pounds) = 83420 Pounds

3) Material price variance = (SP-AP)AQ

8342 = (5*83420-83420X)

83420X = 417100-8342

X(actual cost) = 4.90 per pound

4) Labor efficiency variance = (SH-AH)SR

-6600 = (16300*.90*10-10X)

10X = 146700+6600

X(actual hour) = 15330 Hour

5) Labor rate variance = (SR-AR)AH

-6132 = (10*15330-15330X)

15330X = 159432

X(actual rate) = 10.40