Asked by Camri Baldwin on Apr 25, 2024
Fortes Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for April:
Required:a. Compute the materials price variance for April.b. Compute the materials quantity variance for April.c. Compute the labor rate variance for April.d. Compute the labor efficiency variance for April.e. Compute the variable overhead rate variance for April.f. Compute the variable overhead efficiency variance for April.
Materials Price Variance
The difference between the actual cost of materials used in production and the budgeted cost of materials, based on standard prices and actual quantities purchased.
Variable Manufacturing
Costs in manufacturing that vary directly with the level of production, such as raw materials and direct labor costs.
- Determine diverse kinds of variances, for instance, price and amount variations in materials.
- Ascertain variations in labor rate and effectiveness.
- Work out the variable overhead rate and examine efficiency deviations.
Learning Objectives
- Determine diverse kinds of variances, for instance, price and amount variations in materials.
- Ascertain variations in labor rate and effectiveness.
- Work out the variable overhead rate and examine efficiency deviations.
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