Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Erie Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been

Erie Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate mp3 player are as follows:

Standard Hours Standard Rate per Hour Standard Cost
30 minutes $5.40 $2.70

During August, 10,320 hours of direct labor time were needed to make 19,500 units of the Jogging Mate. The direct labor cost totaled $54,696 for the month.

Required:

1. According to the standards, what direct labor cost should have been incurred to make 19,500 units of the Jogging Mate? By how much does this differ from the cost that was incurred? (Round Standard labor time per unit and Standard direct labor rate to 2 decimal places.)

image text in transcribed

2. Break down the difference in cost from (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations.)

image text in transcribed

3. The budgeted variable manufacturing overhead rate is $4.5 per direct labor-hour. During August, the company incurred $49,536 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations and round your final answers to nearest whole dollar.)

image text in transcribed

Required: 1. According to the standards, what direct labor cost should have been incurred to make 19 Standard labor time per unit and Standard direct labor rate to 2 decimal places.) Number of units manufactured Standard labor time per unit Total standard hours of labor time allowed Standard direct labor rate per hour Total standard direct labor cost Actual direct labor cost Standard direct labor cost Total variance $ 2. Break down the difference in cost from (1) above into a labor rate variance and a unfavorable, and "None" for no effect (i.e., zero variance). Do not round intern Labor rate variance Labor efficiency variance 3. The budgeted variable manufacturing overhead rate is $4.5 per direct labor-hour. Duri overhead rate and efficiency variances for the month. (Indicate the effect of each varia not round intermediate calculations and round your final answers to nearest whole Variable overhead rate variance Variable overhead efficiency variance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For Non-Finance Executives

Authors: Anurag Singal

1st Edition

1952538327, 9781952538322

More Books

Students also viewed these Accounting questions

Question

Find the determinant of the matrix. 1. 2. 3. 4. 51 3 2 -4 -3 5 5 -2

Answered: 1 week ago

Question

How do patients across cultures prefer to make medical decisions?

Answered: 1 week ago