Erle Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: standard Hours 30 minutes Standard Rate per Hour $ 5.80 During August, 10,310 hours of direct labor time were needed to make 19,200 units of the Jogging Mate. The direct labor cost totaled $58,767 for the month. standard Cost $ 2.90 Required: 1. What is the standard labor-hours allowed (SH) to makes 19,200 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 19,200 Jogging Mates? 3. What is the labor spending varlance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $51,550 In variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. Do not round Intermediate calculations.) 1. Standard labor-hours allowed 2. Standard labor cost allowed 3. Labor spending variance 4. Labor rate variance 4. Labor efficiency variance 5. Variable overhead rate variance 5. Variable overhead efficiency variance $ $ $ 69 69 69 8,685 53,780 3,407 U 943 F 4,350 U 8,492 U 3,225 U
Erle Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: standard Hours 30 minutes Standard Rate per Hour $ 5.80 During August, 10,310 hours of direct labor time were needed to make 19,200 units of the Jogging Mate. The direct labor cost totaled $58,767 for the month. standard Cost $ 2.90 Required: 1. What is the standard labor-hours allowed (SH) to makes 19,200 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 19,200 Jogging Mates? 3. What is the labor spending varlance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $51,550 In variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values. Do not round Intermediate calculations.) 1. Standard labor-hours allowed 2. Standard labor cost allowed 3. Labor spending variance 4. Labor rate variance 4. Labor efficiency variance 5. Variable overhead rate variance 5. Variable overhead efficiency variance $ $ $ 69 69 69 8,685 53,780 3,407 U 943 F 4,350 U 8,492 U 3,225 U
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 2EB: Salley is developing material and labor standards for her company. She finds that it costs $0.55 per...
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Transcribed Image Text:Erle Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The
labor standards that have been set for one Jogging Mate are as follows:
standard
Hours
30 minutes
Standard Rate
per Hour
$ 5.80
standard
Cost
$ 2.90
During August, 10,310 hours of direct labor time were needed to make 19,200 units of the Jogging Mate. The direct labor cost totaled
$58,767 for the month.
Required:
1. What is the standard labor-hours allowed (SH) to makes 19,200 Jogging Mates?
2. What is the standard labor cost allowed (SH x SR) to make 19,200 Jogging Mates?
3. What is the labor spending variance?
4. What is the labor rate variance and the labor efficiency variance?
5. The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company Incurred $51,550 In
variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.
(For requirements 3 through 5, Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None"
for no effect (l.e., zero varlance). Input all amounts as positive values. Do not round Intermediate calculations.)
1. Standard labor-hours allowed
2. Standard labor cost allowed
3. Labor spending variance
4. Labor rate variance
4. Labor efficiency variance
5. Variable overhead rate variance
5. Variable overhead efficiency variance
$
$
$
$
$
69
8,685
53,780
3,407 U
943 F
4,350 U
8,492 U
3,225 U
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