Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on

Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.

Kropf Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.

Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate
Direct materials

7.80

liters $ 7.40 per liter
Direct labor 0.40 hours $ 25.70 per hour
Variable manufacturing overhead 0.40 hours $ 6.30 per hour

The company has reported the following actual results for the product for September:

Actual output 10,000 units
Raw materials purchased 78,500 liters
Actual cost of raw materials purchased $ 586,500
Raw materials used in production 78,020 liters
Actual direct labor-hours 3,800 hours
Actual direct labor cost $ 100,302
Actual variable overhead cost $ 20,314

Required:

a. Compute the materials price variance for September.

b. Compute the materials quantity variance for September.

c. Compute the labor rate variance for September.

d. Compute the labor efficiency variance for September.

e. Compute the variable overhead spending variance for September.

f. Compute the variable overhead efficiency variance for September.

(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.)

The company has reported the following actual results for the product for September:

Actual output 10,000 units
Raw materials purchased 78,500 liters
Actual cost of raw materials purchased $ 586,500
Raw materials used in production 78,020 liters
Actual direct labor-hours 3,800 hours
Actual direct labor cost $ 100,302
Actual variable overhead cost $ 20,314

Required:

a. Compute the materials price variance for September.

b. Compute the materials quantity variance for September.

c. Compute the labor rate variance for September.

d. Compute the labor efficiency variance for September.

e. Compute the variable overhead spending variance for September.

f. Compute the variable overhead efficiency variance for September.

(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.)

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_2

Step: 3

blur-text-image_3

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

Public Sector Accounting

Authors: Budding, Tjerk, Grossi, Giuseppe, Tagesson, Torbj

1st Edition

0415683149, 9780415683142

More Books

Students also viewed these Accounting questions