Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I- Runy Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Runy Company was planning to
I- Runy Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Runy Company was planning to produce 5,500 units. The standard costs for one unit of product are as follows: Direct material: 0.5 Kgs at $5 per kg
$ 2.5
Direct labor: 0.3 hours at $30.00 per hour
$ 9.00
During June, 5,000 units were actually produced. The actual costs associated with Junes operations were as follows:
Material purchased: 2,100 Kgs at $6 per Kg
$12,600
Direct labor: 1,400 hours at $31 per hour
$43,400
1. According to the standards, what direct labor cost should have been incurred to prepare 5,500 meals? How much does this differ from the actual direct labor cost? (1pt) Break down the difference computed above into a labor rate(spending) variance and a labor efficiency (activity) variance. (1pt)
I- Runy Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Runy Company was planning to produce 5,500 units. The standard costs for one unit of product are as follows:
Direct material: 0.5 Kgs at $5 per kg | $ 2.5 |
Direct labor: 0.3 hours at $30.00 per hour | $ 9.00 |
During June, 5,000 units were actually produced. The actual costs associated with Junes operations were as follows:
Material purchased: 2,100 Kgs at $6 per Kg | $12,600 |
Direct labor: 1,400 hours at $31 per hour | $43,400 |
1. According to the standards, what direct labor cost should have been incurred to prepare 5,500 meals? How much does this differ from the actual direct labor cost? (1pt)
Break down the difference computed above into a labor rate(spending) variance and a labor efficiency (activity) variance. (1pt)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started