80.2K

Verified Solution

Link Copied!

Bus 213 Managerial Accounting Chapter 21 Excel HW (1 of 2) Due Date: 11/17/17 me Scan House, Inc. manufactures several of products in their Minnesota plant. The standard and actual costs relating to one of these products are shown below Standard Cost per Unit Actual Cost per Unit Direct materials Standard: 1.80 feet at S3.00 per foot Actual: .80 feet at $3.30 per foot S5.40 S 5.94 Direct labor: Standard: 0.90 hours at $18.00 per hour Actual: 0.92 hours at $17.50 per hour 16.20 16.10 Variable overhead: Standard: 0.90 hours at $5.00 per hour Actual: 0.92 hours at $4.50 per hour 4.50 Total cost per unit $26.10 $26.18 Excess of actual cost over standard cost per unit S0.08 As the newly appointed controller of the Minnesota plant, you wanted to verify the variance of $0.08. The variance of $0.08 sounded too good to be true. You recall a discussion of the causes of variances from one of your college classes that raised some potential concerns about the $0.08 The assistant controller has already informed you that the actual production for the month was 12,000 units. You also learned that 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 $0.08 excess unit cost is traceable to apparent inefficient use of labor time? 3. Provide some explanations for the largest two variances you determined in

Answer & Explanation Solved by verified expert

See Answer