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Direct materials Direct labor 9.00 pound @ $11.25 per pound 5.40 hour @ $24.00 per hour 1.80 hour @ $8.25 per hour During the week ended May 6, the following activity took place: 5,848 machine hours were worked. 31,088 pound of raw material were purchased for inventory at a total cost of $356,890. 3,420 cases of finished product were produced. Variable overhead (based on machine hours) 30,622 pound of raw material were used. 18,062 labor hours were worked at an average rate of $24.38 per hour. $46,550 actual variable overhead costs were incurred.

Direct materials Direct labor 9.00 pound @ $11.25 per pound 5.40 hour @ $24.00 per hour 1.80 hour @ $8.25 per hour During the week ended May 6, the following activity took place: 5,848 machine hours were worked. 31,088 pound of raw material were purchased for inventory at a total cost of $356,890. 3,420 cases of finished product were produced. Variable overhead (based on machine hours) 30,622 pound of raw material were used. 18,062 labor hours were worked at an average rate of $24.38 per hour. $46,550 actual variable overhead costs were incurred.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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The standards for one case of liquid weed killer are as follows: Direct materials Direct labor 9.00 pound @ $11.25 per pound 5.40 hour @ $24.00 per hour 1.80 hour @ $8.25 per hour Variable overhead (based on machine hours) During the week ended May 6, the following activity took place: 5,848 machine hours were worked. 31,088 pound of raw material were purchased for inventory at a total cost of $356,890. 3,420 cases of finished product were produced. 30,622 pound of raw material were used. 18,062 labor hours were worked at an average rate of $24.38 per hour. $46,550 actual variable overhead costs were incurred. Required: Calculate each of the following variances. Note: 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.
Transcribed Image Text:The standards for one case of liquid weed killer are as follows: Direct materials Direct labor 9.00 pound @ $11.25 per pound 5.40 hour @ $24.00 per hour 1.80 hour @ $8.25 per hour Variable overhead (based on machine hours) During the week ended May 6, the following activity took place: 5,848 machine hours were worked. 31,088 pound of raw material were purchased for inventory at a total cost of $356,890. 3,420 cases of finished product were produced. 30,622 pound of raw material were used. 18,062 labor hours were worked at an average rate of $24.38 per hour. $46,550 actual variable overhead costs were incurred. Required: Calculate each of the following variances. Note: 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.
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