Question
Arlon Jeffries Candy Corporation produces and sells staffy by the bag and uses a standard cost system to collect costs related to production. The following
Arlon Jeffries Candy Corporation produces and sells staffy by the bag and uses a standard cost
system to collect costs related to production. The following information relates to Arlon Jeffries
operations for last month.
1.Number of bags of taffy sold....................................100,000
2. Standard price of direct material (per pound)......................$0.80
3. Standard direct labor rate per hour .................................$14.00
4. Actual quantity of direct materials purchased (in pounds) ....140,000
5. Standard quantity of direct materials per bag (in pounds).... ......1.1
6. Actual quantity of direct materials used...............................???
7. Standard hours of direct labor allowed per bag (in hours).........???
8. Number of bags produced..........................................120,000
9. Actual cost of purchase for direct materials....................$113,400
10. Actual direct labor rate per hour.......................................???
11. Actual direct labor hours used.......................................13,000
12. Direct materials on hand, beginning period..............................0
13. Direct materials on hand, ending period (in pounds)............17,000
14. Labor rate variance ................................................$2,600F
15. Labor Efficiency variance........................................$19,600F
16. Standard VMOH application rate per SDLH...........................$3
17. Actual VMOH incurred..........................................$32,000
Required:
1.How many pounds of direct materials were used in production?
2. Compute Materials quantity and price variance.
3. Determine the actual rate per direct labor hour and standard hours of direct labor allowed
per bag.
4. Compute VMOH Spending variances and VMOH Efficiency variances.
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