Question
Macros Corporation manufactures a single product. The standard cost per unit of product is as follows: Direct Materials - 2 kg of plastic at $5
Macros Corporation manufactures a single product. The standard cost per unit of product is as follows:
Direct Materials - 2 kg of plastic at $5 per kilogram | $10.00 |
Direct labour- 2 hours at $12 per hour | 24.00 |
Variable manufacturing overhead | 8.00 |
Fixed manufacturing overhead | 6.00 |
Total standard cost per unit | $48.00 |
The master manufacturing overhead budget for the month based on the normal productive capacity of 20,000 direct labor hours (10,000 units) shows total variable costs of $80,000 ($4 per labor hour) and total fixed costs of $60,000 ($3 per labor hours). Normal production capacity is 20,000 direct hours. Overhead is applied based on direct labor hours. Actual costs for producing 9,800 units in November were as follows:
Direct Materials (20,500 kilograms) | $100,450 |
Direct labor (19,600 hours) | 239,120 |
Variable manufacturing overhead | 78,100 |
Fixed manufacturing overhead | 59,200 |
Total standard cost per unit | $ 476,870 |
The purchasing department normally buys the quantities of raw materials that are expected to be used in production each month.
What is the amount of the labor efficiency variance? *
(Standard Hrs- Actual Hrs)*Std Rate
(19600-19600)*12 = 0.00 |
a. What is the actual price of materials on a per unit basis? *
b. What is the actual rate of labor on a per hour basis? *
c. What is the amount of the labor efficiency variance?
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