MATERIALS, LABOR, AND OVERHEAD VARIANCES Bertgon Manufacturing has the following standard cost sheet for one of its products: Direct materials (6 ft. @ $5) $30 Direct labor (1.5 hrs. @ $10) 15 Fixed overhead (1.5 hrs. @ $2*) 3 Variable overhead (1.5 hrs. @ $4*) 6 Standard unit cost $54 During the most recent year, the following actual results were recorded: Production 12,000 units Fixed overhead $33,000 Variable overhead $69,000 Direct materials (71,750 ft. purchased) $361,620 Direct labor (17,900 hrs.) $182,580 Required:Compute the following variances:1. Direct materials price and usage variances.2. Direct labor rate and efficiency variances.3. Variable overhead spending and efficiency variances.4. Fixed overhead spending and volume variances.

Standard rate = SR Standard quantity = SQ Actual rate= AR Actual quantity =AQ Standard hours =SH Actual hours =AH MATERIAL PRICE VARIANCE = ( SR- AR ) AQ =(SR*AR)- (AR*AQ) =(5*71750)-361620 =363750-361620 = 2130 UNFAVOURABLE MATERIAL USAGE VARIANCE =(SQ-AQ)SR =[(6*12000)-71750] * 5 =72000-71750 )*5 =1250 FAVOURABLE LABOUR RATE VARIANCE =(SR-AR)AH =(10*17900)-182580 =179000-182580=3580 UNFAVOURABLE LABOUR EFFICIENCY VARIANCE = (SH-AH) SR =[(12000*1.5)- 17900]* 10 =1000 FAVOURABLE VARIABLE OVERHEAD EFFICIENCY VARIANCE = (SH-AH)SR =(18000-17900)4 =400 FAVOURABLE VARIABLE OVERHEAD SPENDING VARIANCE =STANDARD OVERHEAD – ACTUAL OVERHEAD = (17900*4)- 69000 = 71600-69000 =2600 FAVOURABLE FIXED OVERHEAD SPENDING VARIANCE =BUDGETED OVERHEAD – ACTUAL OVERHEAD = 33000-36000 =3000 UNFAVOURABLE FIXED OVERHEAD EFFICIENCY VARIANCE = BUDGETED * FIXED OVERHEAD PER OUTPUT – ACTUAL * FIXED OVERHEAD PER OUTPUT = (36000-33000) =3000 FAVOURABLE

MATERIALS, LABOR, AND OVERHEAD VARIANCES Bertgon Manufacturing has the following standard cost sheet for one of its products: Direct materials (6 ft. @ $5) $30 Direct labor (1.5 hrs. @ $10) 15 Fixed...

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MATERIALS, LABOR, AND OVERHEAD VARIANCES Bertgon Manufacturing has the following standard cost sheet for one of its products:

Direct materials (6 ft. @ $5)	$30
Direct labor (1.5 hrs. @ $10)	15
Fixed overhead (1.5 hrs. @ $2*)	3
Variable overhead (1.5 hrs. @ $4*)	6
Standard unit cost	$54

During the most recent year, the following actual results were recorded:

Production	12,000 units
Fixed overhead	$33,000
Variable overhead	$69,000
Direct materials (71,750 ft. purchased)	$361,620
Direct labor (17,900 hrs.)	$182,580

Required:

Compute the following variances:

1. Direct materials price and usage variances.

2. Direct labor rate and efficiency variances.

3. Variable overhead spending and efficiency variances.

4. Fixed overhead spending and volume variances.

Answered Same DayDec 24, 2021

Answer To: MATERIALS, LABOR, AND OVERHEAD VARIANCES Bertgon Manufacturing has the following standard cost sheet...

David answered on Dec 24 2021

115 Votes

Standard rate = SR
Standard quantity = SQ
Actual rate= AR
Actual quantity =AQ
Standard hours =SH
Actual hours =AH

MATERIAL PRICE VARIANCE
= ( SR- AR ) AQ
=(SR*AR)- (AR*AQ)
=(5*71750)-361620
=363750-361620 = 2130 UNFAVOURABLE

MATERIAL USAGE VARIANCE
=(SQ-AQ)SR
=[(6*12000)-71750] * 5...

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MATERIALS, LABOR, AND OVERHEAD VARIANCES Bertgon Manufacturing has the following standard cost sheet for one of its products: Direct materials (6 ft. @ $5) $30 Direct labor (1.5 hrs. @ $10) 15 Fixed...

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