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:
Quantity Cost
Direct material purchased65,000meters. $633,750 9.75
Direct materials used80,500meters 784,875 9.75
Direct labour 15,000hours 225,000 15
Variable overhead 92,500
Fixed overhead 112,500
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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