Exercise 10-4 Direct Labor and Variable Manufacturing Overhead Variances [LO10-2, LO10-3] 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 Standard Hours 18 minutes per Hour $17.00 Cost $5.10 During 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 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 Labor efficiency variance 5. Variable overhead rate variance Variable overhead efficiency variance
Exercise 10-4 Direct Labor and Variable Manufacturing Overhead Variances [LO10-2, LO10-3] 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 Standard Hours 18 minutes per Hour $17.00 Cost $5.10 During 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 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 Labor efficiency variance 5. Variable overhead rate variance Variable overhead efficiency variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please Help
![Exercise 10-4 Direct Labor and Variable Manufacturing Overhead Variances [LO10-2, LO10-3]
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
Standard
Hours
18 minutes
per Hour
$17.00
Cost
$5.10
During 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 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
Labor efficiency variance
5.
Variable overhead rate variance
Variable overhead efficiency variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8aeb4c9c-8d33-4b47-954d-a4d3ce02aa40%2Fee414eb7-d936-4ea7-b370-e9c375c63409%2F100116q.png&w=3840&q=75)
Transcribed Image Text:Exercise 10-4 Direct Labor and Variable Manufacturing Overhead Variances [LO10-2, LO10-3]
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
Standard
Hours
18 minutes
per Hour
$17.00
Cost
$5.10
During 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 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
Labor efficiency variance
5.
Variable overhead rate variance
Variable overhead efficiency variance
Expert Solution
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 3 steps
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education