Problem $10-13($Algo$)$ Basic Variance Analysis; the Impact of Variances on Unit Costs $[$LO$10-1,$ LO$10-2,$ LO$10-3]$

Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May.

Standard Cost per Unit Actual Cost per Unit

Direct materials:

Standard: $1\mathrm{.}90$ feet at $$3\mathrm{.}60$ per foot $ $6\mathrm{.}84$

Actual: $1\mathrm{.}85$ feet at $$4\mathrm{.}00$ per foot $ $7\mathrm{.}40$

Direct labor:

Standard: $1\mathrm{.}05$ hour at $$14\mathrm{.}00$ per hour $14\mathrm{.}70$

Actual: $1\mathrm{.}10$ hour at $$13\mathrm{.}50$ per hour $14\mathrm{.}85$

Variable overhead:

Standard: $1\mathrm{.}05$ hour at $$7\mathrm{.}00$ per hour $7\mathrm{.}35$

Actual: $1\mathrm{.}10$ hour at $$6\mathrm{.}60$ per hour $7\mathrm{.}26$

Total cost per unit $ $28\mathrm{.}89$ $ $29\mathrm{.}51$

Excess of actual cost over standard cost per unit $ $0\mathrm{.}62$

The production superintendent was pleased when he saw this report and commented: $$This $$0\mathrm{.}62$ excess cost is well within the $4$ percent limit management has set for acceptable variances. It's obvious there's not much to worry about with this product."

Actual production for the month was $16,500$ units. Variable overhead cost is assigned to products based on direct labor$-$hours. There were no beginning or ending inventories of materials.

Required:

Compute the following variances for May:

Materials price and quantity variances.

Labor rate and efficiency variances.

Variable overhead rate and efficiency variances.

How much of the $$0\mathrm{.}62$ excess unit cost is traceable to each of the variances computed in requirement $1.$

How much of the $$0\mathrm{.}62$ excess unit cost is traceable to apparent inefficient use of labor time?

Required $2.$

How much of the $$0\mathrm{.}62$ excess unit cost is traceable to each of the variances computed in requirement $1.$

Note: 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. Round your answers to $2$ decimal places.

Materials:

Price variance

Quantity variance $0\mathrm{.}00$

Labor:

Rate variance

Efficiency variance $0\mathrm{.}00$

Variable overhead:

Rate variance

Efficiency variance $0\mathrm{.}00$

Excess of actual over standard cost per unit $$0\mathrm{.}00$

Required $3.$

How much of the $$0\mathrm{.}62$ excess unit cost is traceable to apparent inefficient use of labor time?

Note: 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. Round your final answers to $2$ decimal places.

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Excess of actual over standard cost per unit

Less portion attributable to labor inefficiency:

Labor efficiency variance

Variable overhead efficiency variance $0\mathrm{.}00$

Portion due to other variances $$0\mathrm{.}00$