90.2K

Verified Solution

Link Copied!

Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with $1$a$.$ Compute the following variances for May, materials price and quantity variances.

$1$b$.$ Compute the following variances for May, labor rate and efficiency variances.

$1$c$.$ Compute the following variances for May, variable overhead rate and efficiency variances.

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. How much of the $$0\mathrm{.}82$ 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.

$\backslash$table$[[$Materials:$,,,,],[$Price variance,,,,$],[$Quantity variance,,,,$],[$Labor:$,,,,],[$Rate variance,,,,$],[$Efficiency variance,,,,$],[$Variable overhead:,,,,$],[$Rate variance,,,,$],[$Efficiency variance,,,,$],[$Excess of actual over standard cost per unit,,,,$]]$ How much of the $$0\mathrm{.}82$ 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.

actual cost data for May.

Standard Cost

Actual Cost per

per Unit

Direct materials:

Standard: $1\mathrm{.}90$ feet at $$4\mathrm{.}40$ per foot

Actual: $1\mathrm{.}85$ feet at $$4\mathrm{.}80$ per foot

$$8\mathrm{.}36$

Direct labor:

Standard: $0\mathrm{.}95$ hours at $$18\mathrm{.}9$ per hour

Actual: $1.$B hours at $$$17\mathrm{.}50$ per hour

Variable overhead:

Standard: $0\mathrm{.}95$ hours at $$6\mathrm{.}00$ per hour

Actual: $1\mathrm{.}00$ hours at $$5\mathrm{.}60$ per hour

Total cost per unit

Excess of actual cost over standard cost per unit

The production superintendent was pleased when he saw this report and commented: "This $$0\mathrm{.}82$ excess cost is well within the $4$

percent limit management has set for acceptable varlances. It's obvious that there's not much to worry about with thls product."

Actual production for the month was $18,500$ units. Varlable overhead cost is assigned to products on the basis of direct labor$-$hours.

There were no beginning or ending inventorles of materials.

Required:

Compute the following varlances for May:

a$.$ Materials price and quantity varlances.

b$.$ Labor rate and efficlency varlances.

c$.$ Varlable overhead rate and efficlency varlances.

How much of the $$0\mathrm{.}82$ excess unit cost is traceable to each of the varlances computed in requirement $1.$

How much of the $$0\mathrm{.}82$ excess unit cost is traceable to apparent inefficlent use of labor time?

Show all imagesShow all images

Answer & Explanation Solved by verified expert

See Answer