Standard Cost per Unit Actunt Cost per Unit $ 1.80 $ 2.45 13.50 Direct materials: Standard: 1.80 feet at $1.00 per foot Actual 1.75 feet at $1.40 per foot Direct labori Standard: 0.90 hours at $15.00 per hour Actual 0.95 hours at $14.60 per hour Variable overhead: Standardt 0.90 hours at $6.00 per hour Actual 0.95 hours at $5.60 per hour Total cost per unit Excess of actual cost over standard cost per unit 13.87 5.40 5.32 $21.64 $20.70 $0.94 The production superintendent was pleased when he saw this report and commented: "This $0.94 excess cost is well within the 5 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product." Actual production for the month was 10,000 units, Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Compute the following variances for May: a. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. How much of the $0.94 excess unit cost is traceable to each of the variances computed in (1) above. 3. How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor time? Standard Cost par Actual cont per Unit $ 1.80 $ 2.45 13.50 Direct materials Standard 1.80 feet at $1.00 per foot Actual: 1.75 feet at $1.40 per foot Direct labore Standardi 0.90 hours at $15.00 per hour Actual: 0.95 hours at $14.60 per hour Variable overheads Standard 0.90 hours at $6.00 per hour Actualt 0.95 hours at $5.60 per hour Total cost per unit Excess of actual cost over standard cont per unit 13.67 5.40 5.32 $21.64 $20.70 $0.94 The production superintendent was pleased when he saw this report and commented. This $0.94 excess cost is well within the 5 percent limit management has set for acceptable varlances. It's obvious that there's not much to worry about with this product Actual production for the month was 10,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Compute the following variances for May a. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. How much of the $0.94 excess unit cost is traceable to each of the variances computed in (1) above. 3. How much of the $0.94 excess unit cost is traceable to apparent inefficient use of labor time
