Question
Q3 - May I please get helkp with the following homework problem? Thank you for your help. a) Germ Free produces hand sanitizer. It uses
Q3 - May I please get helkp with the following homework problem? Thank you for your help.
a)Germ Free produces hand sanitizer. It uses units as the cost driver for overhead and employs a standard costing system. The following information was provided by the company's controller:
Actual Data
Produced 14,400 units
Materials purchased 4,600 lbs. for a total of $32,660
Materials used 4,560 lbs.
Labor worked 7,520 hrs. costing $91,368
Actual overhead Fixed $51,800; Variable $38,100
Standard and Budgeted Data
Budgeted units 14,200 units
Budgeted materials 0.35 lb. @ $7.00 per lb.
Budgeted labor 0.5 hours @ $12.10 per hour
Budgeted variable overhead $39,050
Budgeted fixed overhead $51,120
1. What will be the material price and quantity variances and which ones are favorable or unfavorable?
2. What will be the labor rate and efficiency variances and which ones are favorable or unfavorable.
b)Frank Enterprises management claims, "We investigate all variances!" Is this a good management policy? Why or why not?
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