Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows Standard Hours 24 ainutes Standard Rate per Hour $46.20 Standard Cost $2.48 During August, 8,620 hours of direct labor time were needed to make 19,600 units of the Jogging Mate. The direct labor cost totaled $51720 for the month Required: 1. What is the standard labor-hours allowed (SH) to makes 19,600 Jogging Mates? 2 What is the standard labor cost allowed (SH- SR) to make 19,600 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 $4.10 per direct labor-hour Duning August, the company incurred $41376 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month (For requirements 3 through 5, indicate the effect of each veriance by selecting "F for favorable, "U for unfavorable, end "None for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculetions.) 1 Standard labor hours allowed 2. Standard laber cost allowed 3. Labor spending variance 4. Labor rate variance 4 Labor efficiency variance S. Varlable overhead rate varlance 5 Variable overhead efficiency varlance
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows Standard Hours 24 ainutes Standard Rate per Hour $46.20 Standard Cost $2.48 During August, 8,620 hours of direct labor time were needed to make 19,600 units of the Jogging Mate. The direct labor cost totaled $51720 for the month Required: 1. What is the standard labor-hours allowed (SH) to makes 19,600 Jogging Mates? 2 What is the standard labor cost allowed (SH- SR) to make 19,600 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 $4.10 per direct labor-hour Duning August, the company incurred $41376 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month (For requirements 3 through 5, indicate the effect of each veriance by selecting "F for favorable, "U for unfavorable, end "None for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculetions.) 1 Standard labor hours allowed 2. Standard laber cost allowed 3. Labor spending variance 4. Labor rate variance 4 Labor efficiency variance S. Varlable overhead rate varlance 5 Variable overhead efficiency varlance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The
labor standards that have been set for one Jogging Mate are as follows:
Standard
Standard Rate
per Hour
$ 6.20
Standard
Hours
24 minutes
Cost
$ 2.48
During August, 8,620 hours of direct labor time were needed to make 19,600 units of the Jogging Mate. The direct labor cost totaled
$51,720 for the month.
Required:
1. What is the standard labor-hours allowed (SH) to makes 19,600 Jogging Mates?
2 What is the standard labor cost allowed (SH x SR) to make 19,.600 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 S4.10 per direct labor-hour. During August, the company incurred $41,376 in
variable 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.)
1. Standard labor-hours allowed
2. Standard labor cost allowed
3. Labor spending variance
4. Labor rate variance
4. Labor efficiency variance
5. Variable overhead rate variance
5. Variable overhead efficiency variance
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