Paradise Corp. has determined a standard labor cost per unit of $12.50 (1 hour x $12.50 per hour). Last month, Paradise incurred 2,100 direct labor hours for which it paid $25,20O. The company also produced and sold 2,150 units during the month. Calculate the direct labor rate, efficiency, and spending variances. (Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Direct Labor Rate Variance Direct Labor Efficiency Variance Total Direct Labor Spending Variance F F F

Paradise Corp. has determined a standard labor cost per unit of $12.50 (1 hour x $12.50 per hour). Last month, Paradise incurred 2,100 direct labor hours for which it paid $25,20O. The company also produced and sold 2,150 units during the month. Calculate the direct labor rate, efficiency, and spending variances. (Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Direct Labor Rate Variance Direct Labor Efficiency Variance Total Direct Labor Spending Variance F F F

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 7PB: Marymount Company makes one product. In the month of April, it made 3,500 units. Workers were paid...

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At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Case made 24,500 units during June, using 32,000 direct labor hours. They expected to use 31,450 hours per the standard cost card. Their employees were paid $15.75 per hour for the month of June. The standard cost card uses $15.50 as the standard hourly rate. A. Compute the direct labor rate and time variances for the month of June, and also calculate the total direct labor variance. B. If the standard rate per hour was $16.00, what would change?
Kavallia Company set a standard cost for one item at 328,000; allowable deviation is 14,500. Actual costs for the past six months are as follows: Required: 1. Calculate the variance from standard for each month. Which months should be investigated? 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or 14,500. Now which months should be investigated?
Paradise Corporation has determined a standard labor cost per unit of $25 (0.50 hours $50 per hour). Last month, Paradise incurred 976 direct labor hours, for which it paid $26,108. The company produced and sold 2,600 units during the month. Required: Calculate the direct labor rate, efficiency, and spending variances. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places. Direct Labor Rate Variance Direct Labor Efficiency Variance Total Direct Labor Spending Variance
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Beverly Company has determined a standard variable overhead rate of $3.90 per direct labor hour and expects to incur 0.50 labor hours per unit produced. Last month, Beverly incurred 1,650 actual direct labor hours in the production of 3,400 units. The company has also determined that its actual variable overhead rate is $2.40 per direct labor hour. Required: Calculate the variable overhead rate and efficiency variances as well as the total amount of over- or underapplied variable overhead. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Variable Overhead Rate Variance Variable Overhead Efficiency Variance Over- or Underapplied Variable Overhead
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