Exercise $9-10($Algo$)$ Direct Labor and Variable Manufacturing Overhead Variances $[$LO$9-5,$ LO$9-6]$

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:

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Standard Hours

Standard Rate per Hour

Standard Cost

$27$ minutes

$$6\mathrm{.}20$

$$2\mathrm{.}79$

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During August, $9,180$ hours of direct labor time were needed to make $19,000$ units of the Jogging Mate. The direct labor cost totaled $$55,998$ for the month.

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Required:

$1.$ What is the standard labor$-$hours allowed $($SH$)$ to makes $19,000$ Jogging Mates?

$2.$ What is the standard labor cost allowed $($SH $\backslash$times SR$)$ to make $19,000$ 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 $$4\mathrm{.}30$ per direct labor$-$hour. During August, the company incurred $$45,900$ in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.

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$($For requirements $3$ through $5,$ indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).$ Input all amounts as positive values. Do not round intermediate calculations.$)$

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$1.$ Standard labor$-$hours allowed

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$2.$ Standard labor cost allowed

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$3.$ Labor spending variance

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$4.$ Labor rate variance

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$4.$ Labor efficiency variance

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$5.$ Variable overhead rate variance

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$5.$ Variable overhead