Reference no: EM131763312
Problem - Haley Inc. has established the following standard unit costs:
Materials: 10 lbs @ $6 per lb .................................... $ 60.00
Labor: 3hrs. @ $15 per hr. ........................................ 45.00
Factory overhead: 3 hrs. @3.50 per hr. .................. 10.50
Total standard cost per unit ........................................ $ 115.50
The factory overhead budget includes the following data:
Percent of capacity ...................................................................... 85% 100%
Direct labor hours ......................................................................... 76,500 90,000
Variable costs ................................................................................. $153,000 $180,000
Fixed costs ...................................................................................... 135,000 135,000
Total factory overhead cost ......................................................... $288,000 $315,000
Variable overhead rate per hour ................................................. $ 2.00
Fixed overhead rate per hour ....................................................... 1.50
Total overhead rate per hour ........................................................ $ 3.50
Actual manufacturing costs incurred:
Materials: 250,000 lbs. @ $6.20 ....................................................... $1,550,000
Labor: 77,400 hrs. @ $ 14.60 ............................................................. 1,130,040
Factory overhead (including $135,000 fixed) .................................... 295,000
Total actual costs for 25,500 units ....................................................... $2,975,040
Standard cost of 25,500 units (standard time, 76,500 hrs) ............ 2,945,250
Overall variance to be analyzed (unfavorable) .................................. $29,790
Instructions:
(1) Determine the price variance and quality variance for the direct materials costs. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable.
(2) Determine the rate variance and time variance for the direct labor cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable.
(3) Determine the controllable variance and the volume variance for the factory overhead cost. Beside the amount of each variance, write the letter F or U to indicate whether the variance is favorable or unfavorable.
Attachment:- Assignment.rar