Required: 1. How many units were produced last period? 2. How many pounds of direct material were purchased and used in production? 3. What was the actual cost per pound of material? Note: Round your answer to 2 decimal places. 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor-hour? Note: Round your answer to 2 decimal places. 6. How much actual variable manufacturing overhead cost was incurred during the
Required: 1. How many units were produced last period? 2. How many pounds of direct material were purchased and used in production? 3. What was the actual cost per pound of material? Note: Round your answer to 2 decimal places. 4. How many actual direct labor-hours were worked during the period? 5. What was the actual rate paid per direct labor-hour? Note: Round your answer to 2 decimal places. 6. How much actual variable manufacturing overhead cost was incurred during the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
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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![Case 10-17 (Algo) Working Backwards from Variance Data [LO10-1, LO10-2, LO10-3]
Vitex, Incorporated, manufactures a popular consumer product and it provided the following data from its standard cost system:
Inputs
Direct materials
Direct labor
Variable manufacturing overhead
Total standard cost per unit
(1) Standard
Quantity or Hours
2.30 pounds
1.00 hours
1.00 hours
(2) Standard Price
or Rate
$ 16.30 per pound
$ 16.00 per hour
$ 9.50 per hour
Standard Cost
(1) x (2)
$ 37.49
$ 16.00
$ 9.50
$ 62.99
Direct materials
Total
Standard
Cost*
$ 599,840
Price or Rate
Variances Reported
Quantity or
Efficiency
$ 11,252 F
$ 32,600 U
Direct labor
$ 256,000
$ 3,400 U
Variable manufacturing overhead
$ 152,000
$ 4,100 F
*Applied to Work in Process during the period.
$ 16,000 U
$ ?t u
The company's manufacturing overhead cost is applied to production based on 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:
1. How many units were produced last period?
2. How many pounds of direct material were purchased and used in production?
3. What was the actual cost per pound of material?
Note: Round your answer to 2 decimal places.
4. How many actual direct labor-hours were worked during the period?
5. What was the actual rate paid per direct labor-hour?
Note: Round your answer to 2 decimal places.
6. How much actual variable manufacturing overhead cost was incurred during the period?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc92d8f0e-5ce0-494f-a11e-04f0ddb7b0c3%2F731803e4-c1a9-450a-9746-93e99a8b6650%2F4rsue7k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Case 10-17 (Algo) Working Backwards from Variance Data [LO10-1, LO10-2, LO10-3]
Vitex, Incorporated, manufactures a popular consumer product and it provided the following data from its standard cost system:
Inputs
Direct materials
Direct labor
Variable manufacturing overhead
Total standard cost per unit
(1) Standard
Quantity or Hours
2.30 pounds
1.00 hours
1.00 hours
(2) Standard Price
or Rate
$ 16.30 per pound
$ 16.00 per hour
$ 9.50 per hour
Standard Cost
(1) x (2)
$ 37.49
$ 16.00
$ 9.50
$ 62.99
Direct materials
Total
Standard
Cost*
$ 599,840
Price or Rate
Variances Reported
Quantity or
Efficiency
$ 11,252 F
$ 32,600 U
Direct labor
$ 256,000
$ 3,400 U
Variable manufacturing overhead
$ 152,000
$ 4,100 F
*Applied to Work in Process during the period.
$ 16,000 U
$ ?t u
The company's manufacturing overhead cost is applied to production based on 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:
1. How many units were produced last period?
2. How many pounds of direct material were purchased and used in production?
3. What was the actual cost per pound of material?
Note: Round your answer to 2 decimal places.
4. How many actual direct labor-hours were worked during the period?
5. What was the actual rate paid per direct labor-hour?
Note: Round your answer to 2 decimal places.
6. How much actual variable manufacturing overhead cost was incurred during the period?
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Step 1: Define variances
VIEWStep 2: Compute units produced last period
VIEWStep 3: Compute direct material purchased
VIEWStep 4: Compute actual cost of per unit of material
VIEWStep 5: Compute actual labor hours worked
VIEWStep 6: Compute actual labor paid per direct labor hour
VIEWStep 7: Compute actual variance manufacturing overhead cost
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