Question
Milton company produces a product, the company uses a standard cost system. Standard quantity/hours Standard price/rate Standard variable cost/unit DM ? $5/lb ? DL ?
Milton company produces a product, the company uses a standard cost system.
Standard quantity/hours Standard price/rate Standard variable cost/unit
DM ? $5/lb ?
DL ? ? ?
Variable OH ? $4/lb ?
During the month 500 items were produced and sold. Selected information is given below.
Material Used Direct Labor Variable Manufacturing OH
Total standard cost $12,800 $8,500 $1,700
for months production
Actual costs incurred $12,000 ? $1,720
Material Price variance ?
Material Quantity Variance $2,200 U
The following additional information is available for August.
Actual direct labor hours 450 hours
Difference between actual and standard variable cost per item $0.15 Unfavorable
Assuming all materials purchased have been used in production determine:
Direct labor rate variance:
a. $355U
b.$355F
c. $500F
d. $500U
$1710U
Variable overhead efficiency variance
a. $270U
b. $80F
c. $80U
d. $100F
e. $100U
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