Direct materials Direct labor Variable overhead Standard Quantity or Hours 2.70 ounces 0.20 hours 0.20 hours c. Compute the labor efficiency variance. d. Compute the labor rate variance. e. Compute the variable overhead efficiency variance. Standard Price or Rate $ 7.00 per ounce $ 17.00 per hour $6.00 per hour In July the company produced 5,200 units using 14,450 ounces of the direct material and 1,070 direct labor-hours. During the month the company purchased 15,600 ounces of the direct material at a price of $7.2 per ounce. The actual direct labor rate was $16.2 per hour and the actual variable overhead rate was $5.4 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance.
Direct materials Direct labor Variable overhead Standard Quantity or Hours 2.70 ounces 0.20 hours 0.20 hours c. Compute the labor efficiency variance. d. Compute the labor rate variance. e. Compute the variable overhead efficiency variance. Standard Price or Rate $ 7.00 per ounce $ 17.00 per hour $6.00 per hour In July the company produced 5,200 units using 14,450 ounces of the direct material and 1,070 direct labor-hours. During the month the company purchased 15,600 ounces of the direct material at a price of $7.2 per ounce. The actual direct labor rate was $16.2 per hour and the actual variable overhead rate was $5.4 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours. Required: a. Compute the materials quantity variance. b. Compute the materials price variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Answer complete question please, otherwise skip it, answer in text form please (without image)
![Doby Corporation makes a product with the following standard costs:
Direct materials
Direct labor
Variable overhead
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
In July the company produced 5,200 units using 14,450 ounces of the direct material and 1,070 direct labor-hours. During the month
the company purchased 15,600 ounces of the direct material at a price of $7.2 per ounce. The actual direct labor rate was $16.2 per
hour and the actual variable overhead rate was $5.4 per hour. The materials price variance is computed when materials are
purchased. Variable overhead is applied on the basis of direct labor-hours.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the labor rate variance.
Standard Quantity or Hours
2.70 ounces
0.20 hours
0.20 hours
a. Materials quantity variance
b. Materials price variance
c. Labor efficiency variance
d. Labor rate variance
Standard Price or Rate
$7.00 per ounce
$ 17.00 per hour
$ 6.00 per hour
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Input all amounts as positive values.
e. Variable overhead efficiency variance
f. Variable overhead rate variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4be30ba-eff6-49eb-999f-9b2be913dee3%2Fb11b9a05-d3fc-4d56-b71f-ff9b767e7754%2Fpzoxigq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Doby Corporation makes a product with the following standard costs:
Direct materials
Direct labor
Variable overhead
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
In July the company produced 5,200 units using 14,450 ounces of the direct material and 1,070 direct labor-hours. During the month
the company purchased 15,600 ounces of the direct material at a price of $7.2 per ounce. The actual direct labor rate was $16.2 per
hour and the actual variable overhead rate was $5.4 per hour. The materials price variance is computed when materials are
purchased. Variable overhead is applied on the basis of direct labor-hours.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the labor rate variance.
Standard Quantity or Hours
2.70 ounces
0.20 hours
0.20 hours
a. Materials quantity variance
b. Materials price variance
c. Labor efficiency variance
d. Labor rate variance
Standard Price or Rate
$7.00 per ounce
$ 17.00 per hour
$ 6.00 per hour
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Input all amounts as positive values.
e. Variable overhead efficiency variance
f. Variable overhead rate variance
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education