Kropf 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. Inputs. Direct materials. Direct labor Variable manufacturing overhead Actual output Raw materials purchased! Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours The company has reported the following actual results for the product for September: Actual direct labor cost Actual variable overhead cost Standard Quantity or Hours per Unit of Output 7.60 liters 0.60 hours 0.60 hours a. Materials price variance b. Materials quantity variance c. Labor rate variance d. Labor efficiency variance e. variable overhead spending variance f. Variable overhead efficiency variance. 9,800 units 75,200 liters $564,500 74,500 liters 5,500 hours Standard Price or Rate $ 7.20 per liter $23.70 per hour $ 6.10 per hour $135,302 $ 29,314 Required: a. Compute the materials price variance for September. b. Compute the materials quantity variance for September.. c. Compute the labor rate variance for September. d. Compute the labor efficiency variance for September. e. Compute the variable overhead spending variance for September. f. Compute the, variable overhead efficiency variance for September. (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.)
Kropf 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. Inputs. Direct materials. Direct labor Variable manufacturing overhead Actual output Raw materials purchased! Actual cost of raw materials purchased Raw materials used in production Actual direct labor-hours The company has reported the following actual results for the product for September: Actual direct labor cost Actual variable overhead cost Standard Quantity or Hours per Unit of Output 7.60 liters 0.60 hours 0.60 hours a. Materials price variance b. Materials quantity variance c. Labor rate variance d. Labor efficiency variance e. variable overhead spending variance f. Variable overhead efficiency variance. 9,800 units 75,200 liters $564,500 74,500 liters 5,500 hours Standard Price or Rate $ 7.20 per liter $23.70 per hour $ 6.10 per hour $135,302 $ 29,314 Required: a. Compute the materials price variance for September. b. Compute the materials quantity variance for September.. c. Compute the labor rate variance for September. d. Compute the labor efficiency variance for September. e. Compute the variable overhead spending variance for September. f. Compute the, variable overhead efficiency variance for September. (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
Related questions
Question
Transcribed Image Text:Kropf 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.
Inputs
Direct materials.
Direct labor
Variable manufacturing overhead
Actual output
Raw materials purchased
Actual cost of raw materials purchased
Raw materials used in production
Actual direct labor-hours
Actual direct labor cost
Actual variable overhead cost
Standard Quantity or
Hours per Unit of
Output
The company has reported the following actual results for the product for September:
Required:
a. Compute the materials price variance for September.
b. Compute the materials quantity variance for September..
c. Compute the labor rate variance for September.
a.
Materials price variance
b. Materials quantity variance
c. Labor rate variance
7.60 liters
0.60 hours
0.60 hours
d. Labor efficiency variance
e. variable overhead spending variance
1. Variable overhead efficiency variance
9,800 units
75,200 liters
$564,500
74,500 liters
5,500 hours
Standard Price or Rate.
$ 7.20 per liter
$23.70 per hour
$ 6.10 per hour
$135,302
$ 29,314
d. Compute the labor efficiency variance for September.
e. Compute the variable overhead spending variance for September.
f. Compute the, variable overhead efficiency variance for September.
(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.)
Transcribed Image Text:The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below:
Standard Quantity
or Hours.
7.0 millilitres
0.3 hours
Standard Price
or Rate.
Standard
Cost
$2.17
$3.60
Direct materials.
Direct labour
$ 0.31 per millilitre
$12.00 per hour
During the most recent month, the following activity was recorded:
a. 23,000 millilitres of material was purchased at a cost of $0.26 per millilitre.
b. All of the material was used to produce 3,640 bottles of Clean-All.
c. 600 hours of direct labour time was recorded at a total labour cost of $7,200.
Assume that instead of producing 3,640 bottles of Clean-All during the month, the company produced only 2,000 bottles, using 19,000
millilitres of material. (The rest of the material purchased remained in raw materials inventory.)
Required.
Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for
favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
Materials price variance
Materials quantity 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 with 4 images
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