Majer Corporation makes a product with the following standard costs: Standard Quantityor HoursStandard Price orRateStandard Cost Per UnitDirect materials 6.7ounces$3.00per ounce$20.10Direct labor 0.7hours$18.00per hour$12.60Variable overhead 0.7hours$3.00per hour$2.10 The company reported the following results concerning this product in February. Originally budgeted output 5,700unitsActual output 8,500unitsRaw materials used in production 30,800ouncesActual direct labor-hours 1,980hoursPurchases of raw materials 31,800ouncesActual price of raw materials$92.90per ounceActual direct labor rate$102.40per hourActual variable overhead rate$4.80per hour The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for February is: Majer Corporation makes a product with the following standard costs:StandardStandard Quantityor Hours6.7 ounces0.7 hoursStandard Price orCost PerUnitRate$ 3.00 per ounce$ 18.00 per hour$ 3.00 per hour$20.10$12.60$ 2.10Direct materialsDirect laborVariable overhead0.7 hoursThe company reported the following results concerning this product in February.Originally budgeted outputActual output5,700 units8,500 unitsRaw materials used in production 30,800 ounces1,980 hours31,800 ouncesActual direct labor-hoursPurchases of raw materialsperActual price of raw materials$ 92.90ounceActual direct labor rate$102.40 per hour$ 4.80 per hourActual variable overhead rateThe company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed whenthe materials are purchased.The variable overhead efficiency variance for February is:Multiple Choice$11,860 U$11,860 F$11,910 F$11,910 U

Name: Majer Corporation makes a product with the following standard costs:
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Description: Majer Corporation makes a product with the following standard costs: Standard Quantityor HoursStandard Price orRateStandard Cost Per UnitDirect materials 6.7ounces$3.00per ounce$20.10Direct labor 0.7hours$18.00per hour$12.60Variable overhead 0.7hour

The variance is the difference between standard and actual production dats of the current period.

Answered: $ 3.00 per ounce $ 18.00 per hour $…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...

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Majer Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials		6.7	ounces	$	3.00	per ounce	$	20.10
Direct labor		0.7	hours	$	18.00	per hour	$	12.60
Variable overhead		0.7	hours	$	3.00	per hour	$	2.10

The company reported the following results concerning this product in February.


Originally budgeted output		5,700	units
Actual output		8,500	units
Raw materials used in production		30,800	ounces
Actual direct labor-hours		1,980	hours
Purchases of raw materials		31,800	ounces
Actual price of raw materials	$	92.90	per ounce
Actual direct labor rate	$	102.40	per hour
Actual variable overhead rate	$	4.80	per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead efficiency variance for February is:

Majer Corporation makes a product with the following standard costs:
Standard
Standard Quantity
or Hours
6.7 ounces
0.7 hours
Standard Price or
Cost Per
Unit
Rate
$ 3.00 per ounce
$ 18.00 per hour
$ 3.00 per hour
$20.10
$12.60
$ 2.10
Direct materials
Direct labor
Variable overhead
0.7 hours
The company reported the following results concerning this product in February.
Originally budgeted output
Actual output
5,700 units
8,500 units
Raw materials used in production 30,800 ounces
1,980 hours
31,800 ounces
Actual direct labor-hours
Purchases of raw materials
per
Actual price of raw materials
$ 92.90
ounce
Actual direct labor rate
$102.40 per hour
$ 4.80 per hour
Actual variable overhead rate
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when
the materials are purchased.
The variable overhead efficiency variance for February is:
Multiple Choice
$11,860 U
$11,860 F
$11,910 F
$11,910 U

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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