Material, Labor, and Variable Overhead Variances The following summarized manufa
ID: 2579269 • Letter: M
Question
Material, Labor, and Variable Overhead Variances The following summarized manufacturing data relate to Thomas Corporation’s April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours. Standard Units Costs Total Actual Costs Direct material Standard (2 lb. @ $9.00/lb.) $18 Actual (4,200 lb. @ $10.20/lb.) $42,840 Direct labor Standard (0.5 hr. @ $24/hr.) $12 Actual (950 hrs. @ $23.40/hr.) 22,230 Variable overhead Standard (0.5 hr. @ $6/hr.) $3 Actual - 6,450 Total $33 $71,520 Determine the following variances: Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.
Explanation / Answer
$570
(Favourable)
$1,200
(Favourable)
A Units produced 2,000 B Monthly capacity(labor hours) 1100 C Direct material standard quantity per unit 2 lb D Direct material standard price $9 per lb E=C*D Standard direct material cost per unit $18 F Actual total material quantity 4,200 lb G Actual material price $10.20 per lb H=F*G Actual total material cost $42,840 I Standard direct labor hour per unit 0.5 hour J Standard direct labor rate $24 per hour K=I*J Standard direct labor cost per unit $12 L Actual total labor hours 950 M Actual labor rate $23.40 per hour N=L*N Actual total direct labor cost $22,230 P Variable overhead standard rate $6 per hour Q=P*I Standard Variable overhead cost per unit $3 R Actual total variable overhead cost $6,450 S=H+N+R Actual total cost $71,520 T=2000*E Standard total direct material cost $36,000 U=2000*K Standard total direct labor cost $24,000 V=2000*Q Standard total variable overhead cost $6,000 X=T-H Direct Material cost variance ($6,840) Unfavourable Y=U-N Direct labor cost variance $1,770 Favourable Z=V-R Variable overhead cost variance ($450) Unfavourable MPV=F*(D-G) Direct material price variance ($5,040.00)(Unfvourable) (Actual quantity*(Standard price-Actual price)= (4200*(9-10.2) MQV=D*(C*A-F) Direct material quantity variance ($1,800) (Standard Price*(Standard quantity-Actual Quantity)= (18*(2*2000-4200) (Unfavourable) LRV=L*(J-M) Direct labor rate variance$570
(Favourable)
(Actual hour*(Standard rate-Actual rate)= (950*(24-23.4) LEV=J*(I*A-L) Direct labor Efficiency variance$1,200
(Favourable)
(Standard rate*(Standard hour -Actual hour) (24*(0.5*2000-950)