Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costS. The labor standards that have been set for one Jogging Mate are as follows: Standard Standard Rate Standard per Hour $6.20 Hours Cost 27 minutes $2.79 During August, 9,250 hours of direct labor time were needed to make 19,200 units of the Jogging Mate. The direct labor cost totaled $56,425 for the month. Required: 1. What is the standard labor-hours allowed (SH) to makes 19,200 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 19,200 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $44,400 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None"
Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costS. The labor standards that have been set for one Jogging Mate are as follows: Standard Standard Rate Standard per Hour $6.20 Hours Cost 27 minutes $2.79 During August, 9,250 hours of direct labor time were needed to make 19,200 units of the Jogging Mate. The direct labor cost totaled $56,425 for the month. Required: 1. What is the standard labor-hours allowed (SH) to makes 19,200 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 19,200 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $44,400 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None"
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 2EB: Salley is developing material and labor standards for her company. She finds that it costs $0.55 per...
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