Acct 203 1. (30 points) Danny Corporation makes a product with the following sta
ID: 340599 • Letter: A
Question
Acct 203 1. (30 points) Danny Corporation makes a product with the following standard costs Standard Quaty Standard Price Or Hours Or Rate Inputs Direct Material Direct Labor Variable Overhead 3.9 liters 5.00 per liter 0.2 hours 0.2 hours 17.00 per hour 6.00 per hour The company reported the following results concerning this product in August. Originally budgeted output Actual output Raw materials used in production 37,330 liters Actual direct labor hours Purchases of raw materials Actual price of raw materials Actual direct labor rate Actual variable overhead rate 6600 units 6400 units 2,315 hours 4.50 5.50 31,500 liters 17.10 Required: (All work must be shown to receive credit.) Variable overhead is applied on the basis of direct labor-hours. a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance d. Compute the direct e. Compute the variable overhead efficiency variance f. Compute the variable overhead rate variance labor rate varianceExplanation / Answer
Answer: Direct material Actual Cost Difference Flexible Budget Difference Standard Cost Actual material Actual Rate Actual Cost Actual hours Standard rate Standard hours Standard rate Standard cost 37,330 $ 4.50 $ 167,985.00 37,330.00 $ 5.00 $ 186,650.00 24,960 $ 5.00 $ 124,800.00 $ 18,665.00 $ (61,850.00) Material price variance $ 18,665.00 (186,650-167,985) Favourable Material quantity variance $ (61,850.00) (124,800-186,650) Unfavourable Material cost variance $ (43,185.00) (124,800-167,985) Unfavourable Direct labour Actual Cost Difference Flexible Budget Difference Standard Cost Actual hours Actual Rate Actual Cost Actual hours Standard rate Standard hours Standard rate Standard cost 2,315 $ 17.10 $ 39,586.50 2,315.00 $ 17.00 $ 39,355.00 1,280 $ 17.00 $ 21,760.00 $ (231.50) $ (17,595.00) Labour price variance $ (231.50) (39,355-39,586.50) Unfavourable Labour efficiency variance $ (17,595.00) (21,760-39,355) Unfavourable Labour cost variance $ (17,826.50) (21,760-39,586.50) Unfavourable Direct labour Actual Cost Difference Flexible Budget Difference Standard Cost Actual hours Actual Rate Actual Cost Actual hours Standard rate Standard hours Standard rate Standard cost 2,315 $ 5.50 $ 12,732.50 2,315.00 $ 6.00 $ 13,890.00 1,280 $ 6.00 $ 7,680.00 $ 1,157.50 $ (6,210.00) Variable overhead rate variance $ 1,157.50 (13,890-12,732.50) Unfavourable Variable overhead efficiency variance $ (6,210.00) ($7,680-13,890) Unfavourable Variable overhead cost variance $ (5,052.50) (7,680-12,732.50) Unfavourable a Material quantity variance' $ 61,850.00 Unfavourable Material price variance $ 18,665.00 Favourable Labour efficiency variance $ 17,595.00 Unfavourable Direct labour rate variance $ 231.50 Unfavourable Variable overhead efficiency variance $ 6,210.00 Unfavourable Variable overhead rate variance $ 1,157.50 Favourable