Fortes Inc. has provided the following data concerning one of the products in it
ID: 2575075 • Letter: F
Question
Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for April:
Required:
a. Compute the materials price variance for April.
b. Compute the materials quantity variance for April.
c. Compute the labor rate variance for April.
d. Compute the labor efficiency variance for April.
e. Compute the variable overhead rate variance for April.
f. Compute the variable overhead efficiency variance for April.
(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.)
Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 8.6 ounces $ 6.70 per ounce Direct labor 0.5 hours $ 19.70 per hour Variable manufacturing overhead 0.5 hours $ 5.00 per hourExplanation / Answer
a) Material price variance = (standard price-actual price)actual quantity purchased
= (6.70-55050-309640)
Material price variance =59195 F
b) Material usage variance = (standard quantity-actual quantity)standard price
= (6200*8.6-53350)6.7
Material usage variance = 201 U
C) Labour rate variance = (standard rate-actual rate)actual hours
= (19.70*2910-60700)
Labour rate variance = 3373 U
d) Labour efficiency variance = (standard hour-actual hours)standard rate
= (6200*.5-2910)19.70
Labour efficiency variance = 3743 F
E) Variable overhead rate variance = (standard rate-actual rate)actual hours
= (5*2910-13681)
Variable overhead rate variance = 869 F
F) Variable overhead efficiency variance = (standard hour-actual hours)standard rate
= (6200*.5-2910)5
Variable overhead efficiency variance = 950 F