We produce canvas bags that require .75 yards of fabric and .6 direct labor hours. The fabric costs $10 per yard and our hourly labor rate is $15. Variable manufacturing overhead is assigned on the basis of direct labor hours and the standard hourly rate for variable manufacturing overhead is $5 per hour. We produced 1200 bags in September and incurred the following variable manufacturing costs: Direct material 920 yards @ at a total cost of $8,924. Direct labor is 715 hours at a total cost of 10,796.50. Variable manufacturing overhead 715 hours at a total of 3,503.50. -Calculate an efficiency (quality) variance for direct labor. -Calculate a price variance for direct materials
We produce canvas bags that require .75 yards of fabric and .6 direct labor hours. The fabric costs $10 per yard and our hourly labor rate is $15. Variable manufacturing overhead is assigned on the basis of direct labor hours and the standard hourly rate for variable manufacturing overhead is $5 per hour. We produced 1200 bags in September and incurred the following variable manufacturing costs: Direct material 920 yards @ at a total cost of $8,924. Direct labor is 715 hours at a total cost of 10,796.50. Variable manufacturing overhead 715 hours at a total of 3,503.50. -Calculate an efficiency (quality) variance for direct labor. -Calculate a price variance for direct materials
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:We produce canvas bags that require .75
yards of fabric and .6 direct labor hours.
The fabric costs $10 per yard and our
hourly labor rate is $15. Variable.
manufacturing overhead is assigned on the
basis of direct labor hours and the standard
hourly rate for variable manufacturing
overhead is $5 per hour. We produced
1200 bags in September and incurred the
following variable manufacturing costs:
Direct material 920 yards @ at a total cost
of $8,924. Direct labor is 715 hours at a
total cost of 10,796.50. Variable
manufacturing overhead 715 hours at a
total of 3,503.50.
-Calculate an efficiency (quality) variance
for direct labor.
-Calculate a price variance for direct
materials
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