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Erie Company manufactures a mobile fitness device called the Jogging Mate. The company's labor standards for one Jogging Mate are as follows: Standard Hours Standard
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company's labor standards for one Jogging Mate are as follows:
Standard Hours | Standard Rate per Hour | Standard Cost |
---|---|---|
27 minutes | $ 5.40 | $ 2.43 |
During August, 9,485 hours of direct labor time were needed to make 19,500 units of the Jogging Mate. The direct labor cost totaled $49,322 for the month.
Required:
- What is the standard labor-hours allowed (SH) to makes 19,500 Jogging Mates?
- What is the standard labor cost allowed (SH SR) to make 19,500 Jogging Mates?
- What is the labor spending variance?
- What are the labor rate variance and the labor efficiency variance?
- The budgeted variable manufacturing overhead rate is $4.10 per direct labor-hour. During August, the company incurred $41,734 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.
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