Direct Materials and Direct Labor, Variance Analysis; Factory Overhead Cost Variance Analysis Route 66 Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 6,000 tires were as follows: Standard Costs Actual Costs Direct materials 7,800 Ibs. at $5.40 7,700 Ibs. at $5.30 Direct labor 1,500 hrs. at $17.90 1,530 hrs. at $18.20 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,560 direct labor hrs. Variable cost, $3.50 $5,200 variable cost Fixed cost, $5.50 $8,560 fixed cost Each tire requires 0.25 hours of direct labor. Required: a. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Price variance $ Quantity variance Total direct materials cost variance b. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Rate variance Time variance Total direct labor cost variance

Question

Direct Materials and Direct Labor, Variance Analysis; Factory Overhead Cost Variance Analysis

Route 66 Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 6,000 tires were as follows:

 

  Standard Costs Actual Costs
Direct materials 7,800 lbs. at $5.40 7,700 lbs. at $5.30
Direct Labor 1,500 hrs. at $17.90 1,530 hrs. at $18.20
Factory Overhead

Rates per direct labour hr., based on 100% of normal capacity of 1,560 direct labor hrs.

 
  Variable Cost, $3.50 $5,200 Variable Cost
  Fixed Cost, $5.50 $8,560 Fixed Cost

Each tire requires 0.25 hours of direct labor.

 

Required:

a.  Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount.

Price variance $___________ favorable/unfavorable
Quantity variance ___________ favorable/unfavorable
Total direct materials cost variance $___________ favorable/unfavorable

 

b.  Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount.

Rate variance $___________ favorable/unfavorable
Time variance ___________ favorable/unfavorable
Total direct labor cost variance $___________ favorable/unfavorable

 

c.  Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount.

Variable factory overhead controllable variance $_______________ favorable/unfavorable
Fixed factory overhead volume variance _______________ favorable/unfavorable
Total factory overhead cost variance $_______________ favorable/unfavorable
Expand
Direct Materials and Direct Labor, Variance Analysis; Factory Overhead Cost Variance Analysis
Route 66 Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of
6,000 tires were as follows:
Standard Costs
Actual Costs
Direct materials
7,800 Ibs. at $5.40
7,700 Ibs. at $5.30
Direct labor
1,500 hrs. at $17.90
1,530 hrs. at $18.20
Factory overhead
Rates per direct labor hr.,
based on 100% of normal
capacity of 1,560 direct
labor hrs.
Variable cost, $3.50
$5,200 variable cost
Fixed cost, $5.50
$8,560 fixed cost
Each tire requires 0.25 hours of direct labor.
Required:
a. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance
as a positive amount.
Price variance
$
Quantity variance
Total direct materials cost variance
b. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a
positive amount.
Rate variance
Time variance
Total direct labor cost variance
Expand
Transcribed Image Text

Direct Materials and Direct Labor, Variance Analysis; Factory Overhead Cost Variance Analysis Route 66 Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 6,000 tires were as follows: Standard Costs Actual Costs Direct materials 7,800 Ibs. at $5.40 7,700 Ibs. at $5.30 Direct labor 1,500 hrs. at $17.90 1,530 hrs. at $18.20 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,560 direct labor hrs. Variable cost, $3.50 $5,200 variable cost Fixed cost, $5.50 $8,560 fixed cost Each tire requires 0.25 hours of direct labor. Required: a. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Price variance $ Quantity variance Total direct materials cost variance b. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Rate variance Time variance Total direct labor cost variance

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