Question
Dewberry Gear Inc. makes athletic wear for men and women. The company uses a standard cost system. The following is the standard cost card for
Dewberry Gear Inc. makes athletic wear for men and women. The company uses a standard cost system. The following is the standard cost card for one line of women's athletic wear.Quantity for one unit Standard Rate or Price
Direct materials (meters)4.2$9.15per meter
Direct labour (hours)0.75$15.00per hour
Variable overhead (hours)0.9$4.50per hour
Fixed overhead (hours)0.9$5.50per hour
Overhead application rates are determined on the basis of a normal production volume of 15,000 suits, which is 80% of maximum capacity.Actual results for July 20x1, during which 18,750 suits were made, are as follows:QuantityCostDirect material purchased65,000meters and $633,750. 9.75
Direct materials used80,500meters and $784,875. 9.75
Direct labour15,000hours and $225,000. 15
Variable overhead92,500Fixed overhead112,500
Required:Calculate the following:a.The standard quantity of materials needed to make 18,750 suits.b.The standard quantity of labour-hours needed to make 18,750 suits.c.The direct materials price varianced.The direct materials quantity variancee.The direct labour efficiency variancef.The variable overhead spending varianceg.The fixed overhead volume variance
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