Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Standard Quantity or Hours per Unit of Output Standard Price or Rate $ 6.40 per ounce $22.80 per hour $ 4.70 per hour Inputs Direct materials 8.3 ounces Direct labor 0.7 hours Variable manufacturing overhead 0.7 hours The company has reported the following actual results for the product for April: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours 5,900 units 54,560 ounces $298,530 48,980 ounces 3,890 hours $ 91,060 $ 17,630 Actual direct labor cost Actual variable overhead cost Required: a. Compute the materials price variance for April. b. Compute the materials quantity variance for April. c. Compute the labor rate variance for April. d. Compute the labor efficiency variance for April. e. Compute the variable overhead rate variance for April. f. Compute the variable overhead efficiency variance for April. (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.)
Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Standard Quantity or Hours per Unit of Output Standard Price or Rate $ 6.40 per ounce $22.80 per hour $ 4.70 per hour Inputs Direct materials 8.3 ounces Direct labor 0.7 hours Variable manufacturing overhead 0.7 hours The company has reported the following actual results for the product for April: Actual output Raw materials purchased Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours 5,900 units 54,560 ounces $298,530 48,980 ounces 3,890 hours $ 91,060 $ 17,630 Actual direct labor cost Actual variable overhead cost Required: a. Compute the materials price variance for April. b. Compute the materials quantity variance for April. c. Compute the labor rate variance for April. d. Compute the labor efficiency variance for April. e. Compute the variable overhead rate variance for April. f. Compute the variable overhead efficiency variance for April. (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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing
overhead is applied to products on the basis of direct labor-hours.
Standard Quantity or
Hours per Unit of Output
8.3 ounces
0.7 hours
0.7 hours
Standard Price or Rate
$ 6.40 per ounce
$22.80 per hour
$ 4.70 per hour
Inputs
Direct materials
Direct labor
Variable manufacturing overhead
The company has reported the following actual results for the product for April:
Actual output
5,900 units
Raw materials purchased
Actual cost of raw materials purchased
Raw materials used in production
Actual direct labor-hours
54,560 ounces
$298,530
48,980 ounces
3,890 hours
$ 91,060
$ 17,630
Actual direct labor cost
Actual variable overhead cost
Required:
a. Compute the materials price variance for April.
b. Compute the materials quantity variance for April.
c. Compute the labor rate variance for April.
d. Compute the labor efficiency variance for April.
e. Compute the variable overhead rate variance for April.
f. Compute the variable overhead efficiency variance for April.
(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.)
a.
Materials price variance
b.
Materials quantity variance
C.
Labor rate variance
d.
Labor efficiency variance
Variable overhead rate variance
e.
f. Variable overhead efficiency variance
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