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Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Hours Standard Rate per Hour Standard Cost 30 minutes $ 6.20 $ 3.10 During August, 10,420 hours of direct labor time were needed to make 19,700 units of the Jogging Mate. The direct labor cost totaled $62,520 for the month.
Required: What is the standard labor-hours allowed (SH) to makes 19,700 Jogging Mates?
- What is the standard labor cost allowed (SH SR) to make 19,700 Jogging Mates?
- What is the labor spending variance?
- What is the labor rate variance and the labor efficiency variance?
- The budgeted variable manufacturing overhead rate is $4.70 per direct labor-hour. During August, the company incurred $52,100 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.
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