Question
3. DL and VarMOH variances: HoldOn Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials
3. DL and VarMOH variances: HoldOn Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | ||||
Direct materials |
| 9 | grams | $ | 5.00 | per gram |
Direct labor |
| 1.2 | hours | $ | 14.00 | per hour |
Variable overhead |
| 1.2 | hours | $ | 2.90 | per hour |
The company planned to produce 4,100 units of output during August and reported the following results concerning this product in August.
|
|
|
|
Actual output |
| 4,000 | units |
Raw materials used in production |
| 29,000 | Grams |
Purchases of raw materials |
| 29,000 | Grams |
Actual direct labor-hours |
| 4,600 | hours |
Actual cost of raw materials purchases | $ | 59,500 |
|
Actual direct labor cost | $ | 65,550 |
|
Actual variable overhead cost | $ | 11,060 |
|
The company applies variable overhead on the basis of direct labor-hours.
- Calculate the direct labor spending variance.
- Calculate the direct labor efficiency variance.
- Calculate the direct labor rate variance.
- Calculate the variable overhead activity variance.
- Calculate the variable overhead efficiency variance.
- Calculate the variable overhead rate variance.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started