Question - Calculating Direct Material, Direct Labor, Variable Overhead Variances
Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows:
|
Standard
Quantity
|
Standard
price (Rate)
|
Standard Unit Cost
|
|
Direct materials (clay)
|
1.5 lbs.
|
$1.60 per lb.
|
$2.40
|
|
Direct labor
|
1.5 hrs.
|
$12.00 per hr.
|
$18.00
|
|
Var mfg OH (based on direct labor hrs)
|
1.5 hrs.
|
$1.20 per hr.
|
$1.80
|
|
Fix mfg OH ($250,000 / 100,000 units)
|
|
|
$2.50
|
Barley Hopp had the following actual results last year:
|
Number of units produced and sold
|
110,000 units
|
|
Number of pounds of clay used
|
178,200 lbs.
|
|
Cost of clay
|
$267,300
|
|
Number of labor hours worked
|
150,000 hrs.
|
|
Direct labor cost
|
$2,025,000
|
|
Variable overhead cost
|
$200,000
|
|
Fixed overhead cost
|
$270,000
|
Required: Calculate the following for Barley Hopp:
1. Direct materials, price, quantity, and spending variances.
2. Direct labor rate, efficiency, and spending variances.
3. Variable overhead rate, efficiency, and spending variances.