Direct Materials and Direct Labor Variances
Problem1: Party Balloons Company produces Mylar balloons. The company's direct materials standards for its deluxe balloon include 3 ounces of Mylar. Standard prices for the year were 50.030 per ounce. Direct labor standards for the deluxe balloon specify 0.01 hour of direct labor at a standard direct labor rate of S18 per hour. During January, the company made 200,600 deluxe balloons. Actual production data follow.
Direct materials 602,000 ounces @ $0.028 per ounce
Direct labor 2,000 hours @ $18.50 per hour
Required:
1. Compute the direct materials price and quantity variances.
2. Compute the direct labor rate and efficiency variances.
Overhead Variances
Problem 2: Copa Corporation's accountant left for vacation before completing the monthly cost variance report. The corporation's president has asked you to complete the report. The following data are available (capacities are expressed in machines hours):
|
Actual machine hours
|
17,100
|
|
Standard machine hours allowed
|
17,500
|
|
Actual variable overhead
|
(a)
|
|
Standard variable overhead rate
|
$2.50
|
|
Variable overhead spending variances
|
$750(F)
|
|
Actual fixed overhead efficiency variances
|
(b)
|
|
Actual fixed overhead
|
(c)
|
|
Budgeted fixed overhead
|
$153,000
|
|
Fixed overhead budget variance
|
$1,300 (U)
|
|
Fixed overhead volume variances
|
$4,500 (F)
|
|
Normal capacity in machine hours
|
(d)
|
|
Standard fixed overhead rate
|
(e)
|
|
Fixed overhead applied
|
(f)
|
Required:
Analyze the data and fill in the missing amounts.