TB MC Qu. 10-155 (Algo) Majer Corporation makes a product with ... Majer Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Cost Per UnitDirect materials6.7ounces$ 2.00per ounce$ 13.40Direct labor0.3hours$ 14.00per hour$ 4.20Variable overhead0.3hours$ 2.00per hour$ .60 The company reported the following results concerning this product in February. Originally budgeted output5,300unitsActual output8,100unitsRaw materials used in production30,400ouncesActual direct labor-hours1,940hoursPurchases of raw materials32,800ouncesActual price of raw materials$ 52.90per ounceActual direct labor rate$ 62.40per hourActual variable overhead rate$ 1.10per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead rate variance for February is: TB MC Qu. 10-155 (Algo) Majer Corporation makes a product with ...Majer Corporation makes a product with the following standard costs:Standard Quantity orStandard CostHoursStandard Price or RatePer Unit$ 13.40$ 4.20$ .60Direct materials6.7 ounces$ 2.00 per ounceDirect labor$ 14.00 per hour$ 2.00 per hour0.3 hoursVariable overhead0.3 hoursThe company reported the following results concerning this product in February.Originally budgeted outputActual output5,300 units8,100 unitsRaw materials used in production30,400 ouncesActual direct labor-hours1,940 hoursPurchases of raw materials32,800 ouncesActual price of raw materials$ 52.90 per ounceActual direct labor rate$ 62.40 per hourActual variable overhead rate$ 1.10 per hourThe company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materialsare purchased.The variable overhead rate variance for February is:

Solution: Variable overhead rate variance = (SR - AR) * AH Variable overhead rate variance = ($2 - $1.10) * 1940 = $1,746 F

Answered: Majer Corporation makes a product with…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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TB MC Qu. 10-155 (Algo) Majer Corporation makes a product with ...

Majer Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	6.7	ounces	$ 2.00	per ounce	$ 13.40
Direct labor	0.3	hours	$ 14.00	per hour	$ 4.20
Variable overhead	0.3	hours	$ 2.00	per hour	$ .60

The company reported the following results concerning this product in February.

Originally budgeted output	5,300	units
Actual output	8,100	units
Raw materials used in production	30,400	ounces
Actual direct labor-hours	1,940	hours
Purchases of raw materials	32,800	ounces
Actual price of raw materials	$ 52.90	per ounce
Actual direct labor rate	$ 62.40	per hour
Actual variable overhead rate	$ 1.10	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for February is:

TB MC Qu. 10-155 (Algo) Majer Corporation makes a product with ...
Majer Corporation makes a product with the following standard costs:
Standard Quantity or
Standard Cost
Hours
Standard Price or Rate
Per Unit
$ 13.40
$ 4.20
$ .60
Direct materials
6.7 ounces
$ 2.00 per ounce
Direct labor
$ 14.00 per hour
$ 2.00 per hour
0.3 hours
Variable overhead
0.3 hours
The company reported the following results concerning this product in February.
Originally budgeted output
Actual output
5,300 units
8,100 units
Raw materials used in production
30,400 ounces
Actual direct labor-hours
1,940 hours
Purchases of raw materials
32,800 ounces
Actual price of raw materials
$ 52.90 per ounce
Actual direct labor rate
$ 62.40 per hour
Actual variable overhead rate
$ 1.10 per hour
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials
are purchased.
The variable overhead rate variance for February is:

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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