ID: A 10. Krane Company has a standard costing system and is beach towels which
ID: 2600675 • Letter: I
Question
ID: A 10. Krane Company has a standard costing system and is beach towels which are made in a single department. The standard variable costs for one beach towel (unit) keeps all its costs up to date. The company's main product are as follows Direct materials (3 yards at $1.00 per yard) $ 3. Direct labor (1/2 hour at $9.00 per hour) 4.5 Variable overhead (1/2 hour @ $5.00 per direct labor hour) Standard variable cost per unit susa The company's normal capacity is 10,000 direct labor hours. Its budgeted fixed overhead costs for the year were $24,000. During the year, it produced and sold 22,000 beach towels and it purchased 66,250 yards of direct materials; the purchase cost was $0.99 per yard. The average labor rate was $9.10 per hour, and 10,900 direct labor hours were worked. The company's actual variable overhead costs for the year were $55,100, and its fixed costs were $24,500. Using the data given, compute the following using formulas or diagram form:Explanation / Answer
Direct Labor variance calculation AH x AR AH x SR SH x SR 10900 x $ 9.10 10900 x $ 9.00 11000 x $ 9.00 (22000 x 1/2) $ 99,190 $ 98,100 $ 99,000 A B C Direct labor rate variance (A-B) $ 1,090 U Direct labor efficiency variance (C-B) $ 900 F Total Direct labor cost variance (A-C) $ 190 U