Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows:

	Standard Quantity		Standard Price (Rate)			Standard Unit Cost
Direct materials (clay)	1.60	lbs.	$	1.70	per lb.	$	2.72
Direct labor	1.60	hrs.	$	11.00	per hr.		17.60
Variable manufacturing overhead (based on direct labor hours)	1.60	hrs.	$	1.10	per hr.		1.76
Fixed manufacturing overhead ($275,000.00 ÷ 110,000.00 units)							2.50

Barley Hopp had the following actual results last year:

Number of units produced and sold		115,000
Number of pounds of clay used		198,200
Cost of clay	$	317,120
Number of labor hours worked		160,000
Direct labor cost	$	2,080,000
Variable overhead cost	$	220,000
Fixed overhead cost	$	280,000

Required:
1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp.
2. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp.
3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.

• Required 1
• Required 2
• Required 3

Calculate the direct materials price, quantity, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Direct Materials Price Variance
Direct Materials Quantity Variance
Direct Materials Spending Variance

• Required 2

Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Direct Labor Rate Variance
Direct Labor Efficiency Variance
Direct Labor Spending Variance

• Required 3

Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Variable Overhead Rate Variance
Variable Overhead Efficiency Variance
Variable Overhead Spending Variance

Answer 1

1
Direct Materials Price Variance	19820	F	=317120-(198200*1.7)
Direct Materials Quantity Variance	24140	U	=1.7*(198200-115000*1.6)
Direct Materials Spending Variance	4320	U	=317120-(115000*2.72)
2
Direct Labor Rate Variance	320000	U	=2080000-(160000*11)
Direct Labor Efficiency Variance	264000	F	=11*(160000-115000*1.6)
Direct Labor Spending Variance	56000	U	=2080000-(115000*17.6)
3
Variable Overhead Rate Variance	44000	U	=220000-(160000*1.1)
Variable Overhead Efficiency Variance	26400	F	=1.1*(160000-115000*1.6)
Variable Overhead Spending Variance	17600	U	=220000-(115000*1.76)