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Erie Company manufactures a moblle fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been
Erie Company manufactures a moblle 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: During August, 9,615 hours of direct labor time were needed to make 19,700 units of the Jogging Mate. The direct labot cost totaled $50,950 for the month. Required: 1. What is the standard inbor-hours allowed (5H) to makes 19,700 Jogging Mates? 2. What is the standard labor cost allowed (SH5R) to make 19,700 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.70 per direct labor-hour. During August, the company incurred $48,075 in variable manufacturing overhead cost. Compute the variable overheod rate and efficiency variances for the month. (For requirements 3 through 5 , indicate the effect of each variance by selecting "F" for favorable, "U= for unfavorable, and "None" for no effect (l.e., zero varience). Input all amounts as positive values. Do not round intermediate calculations.)
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