I have this partially answered. Please fill in the blanks. Thank you! Erie Compa
ID: 2523855 • Letter: I
Question
I have this partially answered. Please fill in the blanks. Thank you!
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to contro its costs. The labor standards that have been set for one Jogging Mate are as follows: Hours 27 minutes Standard Standard Rate Standard per Hour $5.80 Cost $2.61 During August, 9,250 hours of direct labor time were needed to make 19,200 units of the Jogging Mate. The direct labor cost totaled $52,725 for the month. Required 1. What is the standard labor-hours allowed (SH) to makes 19,200 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 19,200 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.10 per direct labor-hour. During August, the company incurred $44,400 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, indicate the effect of each variance by selecting "F" for favorable "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.) Answer is not complete. 8,640 50,112 Standard labor-hours allowed Standard labor cost allowed Labor spending variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance 3. 3,538U 5.Explanation / Answer
Requirement 1: Standard Labor Hours Allowed: Jogging Mates Required 19200 Standard Hours allowed per Jogging Mate 27 min Total Standard Labor Hours Allowed 27*19200 518400 Standard Labor Hours Allowed 518400 min 8640 hrs (518400/60) Requirement 2: Standard Labor Cost Allowed: Standard Labor Hours Allowed 8640 Standard Rate per hour ($) 5.8 Standard Labor Cost Allowed (8640*5.8) 50112 Requirement 3: Labor Spending Variance: Standard Labor Cost, SH *SR ($) 50112 Actual Labor Cost, AH*AR ($) 52725 Labor Spending Variance ((SR*SH)-(AR*AH)) -2613 (52725-50112) Requirement 4: Labor Rate Variance: Actual Hours spent, AH (hrs) 9250 Standard Rate per hour, SR ($) 5.8 Standard Cost for actual hours spent (AH*SR) 53650 (9250*5.8) Actual Rate per hour, AR ($) 5.7 (52725/9250) Actual Labor Cost (AH*AR) 52725 (9250*5.7) Labor Rate Variance ((AH*SR)-(AH*AR)) 925 (53650-52725) Labor Efficiency Variance: Standard Labor Hours Allowed, SH 8640 Standard Rate per hour, SR ($) 5.8 Standard Labor Cost, SH *SR ($) 50112 (8640*5.8) Actual Hours spent, AH (hrs) 9250 Standard Rate per hour, SR ($) 5.8 Standard Cost for actual hours spent (AH*SR) 53650 (9250*5.8) Labor Efficiency Variance ((SH*SR)-(AH*SR)) -3538 (50112-53650) 1 Standard Labor Hours Allowed 8640 2 Standard Labor Cost Allowed 50112 3 Labor Spending Variance 2613 U 4 Labor Rate Variance 925 F Labor Efficiency Variance 3538 U