Problem - Vitalite, Inc., produces a number of products, including a body-wrap kit. Standard variable costs relating to a single kit are given below:
Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials ? $4 per yard $ ?
Direct labor ? ? ?
Variable manufacturing overhead ? $2 per direct
labor-hour ?
Total standard cost per kit $44
During August, 600 kits were manufactured and sold. Selected information relating to the month's production is given below:
Materials Used Direct Labor Variable
Manufacturing
Overhead
Total standard cost* ? $7,000 $2,000
Actual costs incurred $11,000 ? $2,020
Materials price variance ?
Materials quantity variance $ 4,600 U
Labor rate variance ?
Labor efficiency variance ?
Variable overhead rate variance ?
Variable overhead efficiency variance ?
*For the month's production.
The following additional information is available for August's production of kits:
Actual direct labor-hours 1,100
Difference between standard and actual cost per kit produced during August $.14 U
Required:
1. What was the total standard cost of the materials used during August?
2. How many yards of material are required at standard per kit?
3. What was the materials price variance for August if there were no beginning or ending inventories of materials?
4. What is the standard direct labor rate per hour?
5. What was the labor rate variance for August? The labor efficiency variance?
6. What was the variable overhead rate variance for August? The variable overhead efficiency variance?
7. Complete the standard cost card for one kit shown at the beginning of the problem.