Question

Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per product follow:
Materials (4 parts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2
Labor (2 hours) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
$11 Budgeted fixed overhead costs for the month are $4,000, and
Shinto expected to manufacture 2,000 units. Actual production, however, was only 1,800 units. Materials prices were 10% over standard, and labor rates were 5% over standard. Of the factory overhead expense, only 80% was used, and fixed overhead was $100 over budget. The actual variable overhead cost was $4,800. In materials usage, 8% more parts were used than were allowed for actual production by the standard, and 6% more labor hours were used than were allowed.
Required:
1. Calculate the materials and labor variances.
2. Calculate the variances for overhead by the four-variance method.


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  • CreatedMarch 31, 2015
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