Brookman, Inc. manufactures lead crystal glasses. The standard direct labor time is 0.5 hour per glass, at a cost of $18 per hour. The actual results for one month's production of 7,000 glasses were 0.4 hours per glass, at a cost of $13 per hour. Calculate the direct labor cost variance and the direct labor efficiency variance. Select the formula, then enter the amounts and compute the cost variance for direct labor and identify whether the variance is favorable (F) or unfavorable (U). Actual Cost Standard Cost Actual Quantity Direct Labor Cost Variance Help Me Solve This Question Help Brookman, Inc. manufactures lead crystal glasses. The standard direct labor time is 0.5 hour per glass, at a cost of $18 per hour. The actual results for one month's production of 7,000 glasses were 0.4 hours per glass, at a cost of $13 per hour. Calculate the direct labor cost variance and the direct labor efficiency variance. Let's begin by computing the cost variance for direct labor. Refer to the information and enter the actual cost and standard cost per hour. You will need to compute the actual quantity for direct labor by multiplying the actual hours per glass by the actual number of glasses produced (= 0.4 hour per glass x 6,500 glasses). For costs, a variance is favorable when actual costs were less than the standard and unfavorable when actual costs exceeded the standard. Actual Cost Standard Cost * Actual Quantity Direct Labor Cost Variance ( $ 15 ) 2,600 5,200 F Now, compute the efficiency variance for direct labor. The actual quantity and standard cost you have determined in the preceding step have been entered in the formula for you. You will need to compute the standard quantity of direct labor by multiplying the standard hours of direct labor per glass by the actual number of glasses produced (= 0.2 hour per glass x 6,500 glasses). I regards to efficiency, a variance is favorable when the actual quantity was less than the standard and unfavorable when the actual quantity exceeded the standard. Actual Quantity Standard Quantity) X Standard Cost Direct labor Efficiency Variance 2,600 1,300 'xs 15 19,500 13 This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. ? Deluxe Fender, which uses a standard cost system, manufactured 20,000 boat fonders during 2018, using 144,000 square feet of extruded vinyl purchased at $1.50 per square foot. Production required 450 direct labor hours that cost $16.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.55 per square foot. The labor standard was 0.025 direct labor hour per fender, at a standard cost of $15.50 per hour. Read the requirement Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost: AQ = actual quantity, FOH = fixed overhead: SC = standard cost, SQ = standard quantity.) Formula Variance Direct materials cost variance Direct labor cost variance Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Deluxe Fender's managers have been making trade-offs? Explain. Print Done Xelp $1. at a 0 Help Me Solve This ende e foc Question Help post regy Deluxe Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 144,000 square feet of extruded vinyl purchased at $1.50 per square foot. Production required 450 direct labor hours that cost $16.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.55 per square foot. The labor standard was 0.025 the direct labor hour per fender, at a standard cost of $15.50 per hour. (F) Read the requirement be is stity terle Direct Direct or Materials $ $ 1 1.25 sq.ft 1.30 sq.ft Labor 12.00/hr. 11.00 hr. 480 hrs sq.ft Actual cost (AC) Standard cost (SC) $ Actual quantity (AQ) 145,000 Standard quantity (SQ) 140,000 sq.ft 540 hrs Now we can determine the cost variances for direct materials and direct labor and identify whether each variance is favorable (F) or unfavorable (U). For costs, a variance is favorable when actual costs were less than the standard and unfavorable when actual costs exceeded the standard Formula Variance This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. materie labora Formula Variance Direct materials cost variance (AC-SC) AQ $ 1.25 - $ 1.30 ) X 145,000 = $ 7.250 F Direct labor cost variance (AC-SC) XAQ =( $12.00 - $11.00 ) 480 = $ 480U Determine the efficiency variances for direct materials and direct labor and identify whether each variance is favorable (F) or unfavorable (U). In regards to efficiency, a variance is favorable when the actual quantity was less than the standard and unfavorable when the actual quantity exceeded the standard, Formula Variance Direct materials efficiency variance = (AQ-SQ) SC = ( 145,000 140,000 )x $ 1.30 = $6,500 u Direct labor efficiency variance = (AQ-SQ)X SC =( 480 540 ) x S 11.00 $ 660 Does the pattern of variances suggest All-Star Fender's managers have been making trade-offs? Explain. F Cost Variance Efficiency Variance Direct materials $ 7.250 F Direct materials $ 6.500U Direct labor 480 Direct labor $ 660 F Carefully review the result of this analysis and consider the meaning of cost and efficiency variances. What does the favorable direct material cost variance and unfavorable direct materials efficiency variance suggest about quality of direct materials that were being used? What does the unfavorable direct labor cost variance and favorable direct labor efficiency variance suggest about quality of labor that was being used? The following information relates to Longman, Inc.'s overhead costs for the month: Click the icon to view the information) Longman allocates manufacturing overhead to production based on standard direct labor hours. Compute the standard variable overhead allocation rate and the standard fixed overhead allocation rate Select the formula, then enter the amounts and compute the standard variable overhead allocation rate, Budgeted variable overhead Budgeted allocation base Standard variable overhead allocation rate = Data Table $ 8,000 $ 3,200 Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units 1,600 hours 4,900 units Print Done Enter any number in the edit fields and then click Check Answer Help Me Solve This X Question Help d th The following information relates to Longman, Inc.'s overhead costs for the month: Click the icon to view the information.) Longman allocates manufacturing overhead to production based on standard direct labor hours. Compute the standard variable overhead allocation rate and the standard fixed overhead allocation rate. Standard overhead allocation rate = Budgeted overhead cost /Budgeted allocation base Let's begin by computing the standard variable overhead allocation rate. To compute this rate, we need to use the budgeted variable overhead cost. Remember that Goldman allocates manufacturing overhead to production based on standard direct labor hours. Go ahead and compute the standard variable overhead allocation rate. Budgeted variable overhead / Budgeted allocation base Standard variable overhead allocation rate $ 7,200 1,200 Now, let's compute the standard fixed overhead allocation rate. The calculation is similar as in the preceding step, except that we will use the budgeted fixed overhead cost. Budgeted fixed overhead Budgeted allocation base Standard fixed overhead allocation rate 3,600 = $ 1,200 3 This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. All parts showing Close