I really need help solving this, i honestly cant figure it out Waterways Corpora
ID: 2474533 • Letter: I
Question
I really need help solving this, i honestly cant figure it out
Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not "ideal" at this point, but the management is working toward that as a goal. At present, the company uses the following standards Materials Item Metal Plastic Rubber Per unit 1 lb 12 oz 4 oz Cost 63¢ per lb $1.00 per lb 88¢ per lb Direct labor Item Labor Predetermined overhead rate based on direct labor hours Per unit 15 min Cost $8.00 per hr $4.28 The January figures for purchasing, production, and labor are: The company purchased 229,000 pounds of raw materials in January at a cost of 78¢ a pound Production used 229,000 pounds of raw materials to make 115,500 units in January Direct labor spent 18 minutes on each product at a cost of $7.80 per hour Overhead costs for January totaled $54,673 variable and $73,800 fixedExplanation / Answer
I ounce =0.0625 lb Materials details per unit Qty (lb) Rate/lb Cost Metal 1 0.63 0.63 Plastic 0.75 1.00 0.75 Rubber 0.25 0.88 0.22 Total 2.00 1.60 Standard Costs Qty/Hr Rate Cost Direct Materials 2.00 0.80 1.60 Direct Labor 0.25 8.00 2.00 Overhead Predetermined 0.25 4.28 1.07 Fixed Overhead 4.67 Actual Information Details Actual units Actual Qty/Hr Actual Rate Actual Amt Std Qty/Hr Actual Output Direct Materials 115,500 229,000 0.78 178,620 231,000 Direct Labor 115,500 34,650 7.80 270,270 28,875 Total Overhead 115,500 34,650 3.71 128,473 28,875 Direct Materials Price Variance= Actual Qty Used( Actual Rate-Std Rate) =229000*(0.78-0.80) 4,580 (F) Direct Material Efficiency Variance =Std Rate ( Actual Qty used-Std qty for actual output) =0.80*(229000-231000) 1,600 (F) Total Direct Material Variance= 6,180 (F) Direct Labor Rate Variance= Actual Hrs Used( Actual Rate-Std Rate) =34650*(7.8-8) 6,930 (F) Direct LAbor Efficiency Variance =Std Rate ( Actual Hrs used-Std Hrs for actual output) =8*(34650-28875) 46,200 (U) Total Direct Labor Variance= 39,270 (U) Total Overhead Variance= Budgeted Overhead variance for Actual output -Actial Overhead =115500*1.07-128473= 4,888 (U)