Question :
A company produces various products. It uses the job order costing system and allocates variable overhead on the basis of direct labor hours. The standard budget for the company is to give 550 units per month, thus last month the company only produced 500 units. The cost accountant is trying to put together the variance analysis for the month, thus, due to an accident, much of the data has been destroyed. What is known for last month is:
Actual net overhead for the month: $175,000
Actual pounds of raw material used: 1,950
Pounds of raw material in starting inventory: 200
Pounds of raw material in ending inventory: 100
Standard price of raw materials per pound: $17
Direct material quantity variance: $850 F
Net direct material variance: $2,800 F
Standard direct labor hours with standard production: 3,300
Predetermined variable overhead rate: $40/DLH
Variable overhead efficiency variance: $6,000 F
Actual fixed overhead for the month: $58,000
Overall direct labor variance: $2,025 U
Actual direct labor wage rate per hour: $16.50
1. Determine the standard direct material quantity per unit?
2. What was the real price paid per unit of direct materials?
3. What was the variable overhead rate variance?
4. Evaluate the standard direct labor rate?
5. Determine the direct labor rate variance?