Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. Thelabor standards that have been set for one Jogging Mate are as follows:StandardStandard RateStandardper Hour$17.00HoursCost18 minutes$5.10During August, 5,750 hours of direct labor time were needed to make 20,000 units of the Jogging Mate. The direct labor cost totaled$102,350 for the month.Required:1. What is the standard labor-hours allowed (SH) to makes 20,000 Jogging Mates?2. What is the standard labor cost allowed (SH × SR) to make 20,000 Jogging Mates?3. What is the labor spending variance?4. What is the labor rate variance and the labor efficiency variance?5. The budgeted variable manufacturing overhead rate is $4 per direct labor-hour. During August, the company incurred $21,850 invariable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.(For requirements 3 through 5, 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. Do not round intermediate calculations.)Standard labor-hours allowed2.Standard labor cost allowed3.Labor spending variance4.Labor rate varianceLabor efficiency variance5.Variable overhead rate varianceVariable overhead efficiency variance

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Answered: Erie Company manufactures a mobile…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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