| Case 10-17 Working Backwards from Variance Data [LO1, LO2, LO3] Please explain in detail how you arrived at your answers... this is always very helpful! Thank you! | You have recently accepted a position with Lorthen Inc. As part of your duties, you review the variances that are reported for each period and make a presentation to the company's executive committee. | | Earlier this morning you received the variances for one of the company's major products for the most recent period. After reviewing the variances and organizing the data for your presentation, you accidentally placed the material on top of some papers that were going to the shredder. In the middle of lunch you suddenly realized your mistake and dashed to the shredding room. There you found the operator busily feeding your pages through the machine. You managed to pull only part of one page from the feeding chute, which contains the following information: | | Standard Cost Card | | Direct materials, 2.10 meters at $16.70 per meter | $ | 35.07 | | Direct labor, 1.00 hours at $15.90 per hour | $ | 15.90 | | Variable overhead, 1.00 hours at $9.40 per hour | $ | 9.40 | | | | | Total Standard Cost | Quantity or Efficiency Variance | Price or Rate Variance | | Direct materials | $ | 666,330 | $ | 33,400 | U | $ | 12,151 | F | | Direct labor | $ | 302,100 | $ | 15,900 | U | $ | 4,000 | U | | Variable overhead | $ | 178,600 | Ruined by shredder | $ | 4,800 | F | | | | The standard for variable overhead is based on direct labor-hours. All of the materials purchased during the period were used in production. | | At lunch your supervisor said how pleased she was with your work and that she was looking forward to your presentation that afternoon. You realize that to avoid looking like a bungling fool you must somehow generate the necessary "backup" data for the variances before the executive committee meeting starts in one hour. | | 1. | How many units were produced during the period? | | 2. | How many meters of direct materials were purchased and used in production? | | Number of meters purchased | | | 3. | What was the actual cost per meter of material? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) | | 4. | How many actual direct labor-hours were worked during the period? | | Actual direct labor-hours | | | 5. | What was the actual rate per direct labor-hour? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) | | Actual rate per direct labor-hour | $ | | 6. | How much actual variable manufacturing overhead cost was incurred during the period? (Omit the "$" sign in your response.) | | Actual variable manufacturing overhead cost | $ | |
