Question
Corex Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of
Corex Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 1,000 direct labor-hours each month and produce 2,000 robes. The standard costs associated with this level of production are as follows:
Total | Per Unit of Product | ||
Direct materials | $ | 41,400 | $ 20.70 |
Direct labor | $ | 8,000 | 4.00 |
Variable manufacturing overhead (based on direct labor-hours) | $ | 3,400 | 1.70 |
$ 26.40 |
During April, the factory worked only 1,100 direct labor-hours and produced 2,400 robes. The following actual costs were recorded during the month:
Total | Per Unit of Product | ||
Direct materials (8,200 yards) | $ | 48,000 | $ 20.00 |
Direct labor | $ | 10,080 | 4.20 |
Variable manufacturing overhead | $ | 4,320 | 1.80 |
$ 26.00 |
At standard, each robe should require 3.00 yards of material. All of the materials purchased during the month were used in production.
- Compute the materials price and quantity variances for April: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places.)
- Compute the labor rate and efficiency variances for April:(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places.)
- Compute the variable manufacturing overhead rate and efficiency variances for April: (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started