Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 1,950 robes. The standard costs associated with this level of production are as follows: Total Per Unit of Product Direct materials $35,490 $18.20 Direct labor $7,020 3.60 Variable manufacturing overhead (based on direct labor-hours) $2,340 1.20 $23.00 During April, the factory worked only 760 direct labor-hours and produced 2,000 robes. The following actual costs were recorded during the month: Total Per Unit of Product Direct materials (6,000 yards) $36,000 $18.00 Direct labor $7,600 3.80 Variable manufacturing overhead $3,800 1.90 $23.70 At standard, each robe should require 2.8 yards of material. All of the materials purchased during the month were used in production. Required: Compute the following variances for April: i. The materials price and quantity variances. ii. The labor rate and efficiency variances. iii. The variable manufacturing overhead rate and efficiency variances.
Helix Company produces several products in its factory, including a karate robe. The company uses a
Total Per Unit of Product Direct materials $35,490 $18.20 Direct labor $7,020 3.60 Variable manufacturing
During April, the factory worked only 760 direct labor-hours and produced 2,000 robes. The following actual costs were recorded during the month:
Total Per Unit of Product Direct materials (6,000 yards) $36,000 $18.00 Direct labor $7,600 3.80 Variable manufacturing overhead $3,800 1.90 $23.70
At standard, each robe should require 2.8 yards of material. All of the materials purchased during the month were used in production.
Required: Compute the following variances for April: i. The materials price and quantity variances. ii. The labor rate and efficiency variances. iii. The variable manufacturing overhead rate and efficiency variances.
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