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Zee Corporation has developed the following cost standards for the production of its leather backpacks: Standard Cost Per Backpack Leather (0.9 yards X $22 per
Zee Corporation has developed the following cost standards for the production of its leather backpacks:
Standard Cost Per Backpack | |
Leather (0.9 yards X $22 per yard) | $19.80 |
Direct Labor (1.3 hrs X $9.00 per hr) | $11.70 |
Variable Overhead (1.30hrs X $15.00 per hr) | $19.50 |
Variable overhead at Zee is applied on the basis of direct labor hours. The actual results for last month were as follows:
Number of backpacks produced | 15,000 |
Direct Labor Hrs Incurred | 18,800 |
Yards of leather purchased | 14,500 |
Yards of leather used in production | 14,100 |
Cost of leather purchased | $306,675 |
Direct Labor Cost | $159,800 |
Varaiable Overhead Cost | $285,760 |
The direct materials purchases varainces is computed when the materials are purchased. Required compute the following variances: a. Materials Price Variance b. Materials Quantity Variance c. Labor Efficiency Variance d. Variable Overhead Rate Variance
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