Barley Hopp, Incorporated, manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard QuantityStandard Price (Rate)Standard Unit CostDirect materials (clay)1.60pounds$ 1.70per pound$ 2.72Direct labor1.60hours$ 14.00per hour22.40Variable manufacturing overhead (based on direct labor hours)1.60hours$ 1.30per hour2.08Fixed manufacturing overhead ($352,000.00 ÷ 160,000.00 units) 2.20Barley Hopp had the following actual results last year:Number of units produced and sold165,000Number of pounds of clay purchased and used298,200Cost of clay$ 536,760Number of labor hours worked210,000Direct labor cost$ 3,780,000Variable overhead cost$ 320,000Fixed overhead cost$ 355,000Required:Calculate the direct materials price, quantity, and total spending variances for Barley Hopp.Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp.Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.

The variance is the difference between actual and standard production data. The variances are…

Answered: Barley Hopp, Incorporated, manufactures…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 28P: Haversham Corporation produces dress shirts. The company uses a standard costing system and has set...

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	Standard Quantity	Standard Price (Rate)	Standard Unit Cost
Direct materials (clay)	1.60	pounds	$ 1.70	per pound	$ 2.72
Direct labor	1.60	hours	$ 14.00	per hour	22.40
Variable manufacturing overhead (based on direct labor hours)	1.60	hours	$ 1.30	per hour	2.08
Fixed manufacturing overhead ($352,000.00 ÷ 160,000.00 units)					2.20

Number of units produced and sold	165,000
Number of pounds of clay purchased and used	298,200
Cost of clay	$ 536,760
Number of labor hours worked	210,000
Direct labor cost	$ 3,780,000
Variable overhead cost	$ 320,000
Fixed overhead cost	$ 355,000

Required:

Calculate the direct materials price, quantity, and total spending variances for Barley Hopp.
Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp.
Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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