Inputs Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit (1) Standard Quantity or Hours 2.00 pounds 1.00 hours 1.00 hours (2) Standard Price or Rate $16.60 per pound $16.00 per hour $9.40 per hour. Variances Reported Price Quantity or or Rate Efficiency Total Standard Cost* $498,000 $9,280 F $240,000 $ 3,200 U $141,000 $ 4,800 F $ 33,200 U $ 16,000 U $ ? U Standard Cost (1) × (2) $33.20 $16.00 $ 9.40 $58.60 Direct materials Direct labor Variable manufacturing overhead *Applied to Work in Process during the period. The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored. Required: 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.) 6. How much actual variable manufacturing overhead cost was incurred during the period?
Inputs Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit (1) Standard Quantity or Hours 2.00 pounds 1.00 hours 1.00 hours (2) Standard Price or Rate $16.60 per pound $16.00 per hour $9.40 per hour. Variances Reported Price Quantity or or Rate Efficiency Total Standard Cost* $498,000 $9,280 F $240,000 $ 3,200 U $141,000 $ 4,800 F $ 33,200 U $ 16,000 U $ ? U Standard Cost (1) × (2) $33.20 $16.00 $ 9.40 $58.60 Direct materials Direct labor Variable manufacturing overhead *Applied to Work in Process during the period. The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored. Required: 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.) 6. How much actual variable manufacturing overhead cost was incurred during the period?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:Inputs
Direct materials
Direct labor
Variable manufacturing overhead
Total standard cost per unit
(1) Standard
Quantity or
Hours
2.00 pounds
1.00 hours
1.00 hours
(2)
Standard
Price
or Rate
$16.60 per pound
$16.00 per hour
$9.40 per hour.
Variances Reported
Total
Standard
Price
Cost*
or Rate
$498,000 $ 9,280 F
$240,000 $ 3,200 U
$141,000 $4,800 F
Quantity or
Efficiency
$ 33,200 U
$ 16,000 U
$ ? U
Standard.
Cost
(1) x (2)
$33.20
$16.00
$9.40
$58.60
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Direct materials
Direct labor
Variable manufacturing overhead
*Applied to Work in Process during the period.
The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased
during the period were used in production. Work in process inventories are insignificant and can be ignored.
Required:
4. How many actual direct labor-hours were worked during the period?
5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)
6. How much actual variable manufacturing overhead cost was incurred during the period?
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