The standards for one case of Springfever Tonic are as follows: Direct materials 4 lb @ $ 5.00/1b = $ 20 3 hr @ $13.00/hr 3 hr @ $ 6.00/hr Direct labor = $ 39 $ 18 Variable overhead (based on direct labor hours) %3! During the week ended August 28, the following activity took place: 7,400 lb of raw materials were purchased for inventory at a cost of $4.95 per pound. 2,000 cases of finished product were produced. 8,300 Ib of raw materials were used. 5,800 direct labor hours were worked at a total cost of $78,300. $35,670 of actual variable overhead costs were incurred.
The standards for one case of Springfever Tonic are as follows: Direct materials 4 lb @ $ 5.00/1b = $ 20 3 hr @ $13.00/hr 3 hr @ $ 6.00/hr Direct labor = $ 39 $ 18 Variable overhead (based on direct labor hours) %3! During the week ended August 28, the following activity took place: 7,400 lb of raw materials were purchased for inventory at a cost of $4.95 per pound. 2,000 cases of finished product were produced. 8,300 Ib of raw materials were used. 5,800 direct labor hours were worked at a total cost of $78,300. $35,670 of actual variable overhead costs were incurred.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Standards for Springfever Tonic Production**
The standards for one case of Springfever Tonic are as follows:
- **Direct Materials:**
- 4 lb @ $5.00/lb = $20
- **Direct Labor:**
- 3 hr @ $13.00/hr = $39
- **Variable Overhead (based on direct labor hours):**
- 3 hr @ $6.00/hr = $18
**Activity Summary for the Week Ended August 28:**
- Purchased 7,400 lb of raw materials at a cost of $4.95 per pound.
- Produced 2,000 cases of finished product.
- Used 8,300 lb of raw materials.
- Worked 5,800 direct labor hours at a total cost of $78,300.
- Incurred $35,670 of actual variable overhead costs.
**Variance Analysis Required:**
Calculate each of the following variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect, i.e., zero variance.)
a. Price variance for raw materials purchased.
b. Raw materials usage variance.
c. Direct labor rate variance.
d. Direct labor efficiency variance.
e. Variable overhead spending variance.
f. Variable overhead efficiency variance.
(Fill in the variance calculations in the provided spaces.)
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