Koontz Company manufactures a number of products. The standards relating to one of these products are...

 

 

  

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Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Standard Actual Cost per Unit Cost per Unit Direct materials: $ 4.68 Standard: 1.80 feet at $2.60 per foot Actual: 1.75 feet at $2.80 per foot $ 4.90 Direct labor: Standard: 0.90 hours at $16.00 per hour Actual: 0.95 hours at $15.40 per hour Variable overhead: Standard: 0.90 hours at $3.00 per hour Actual: 0.95 hours at $2.60 per hour 14.40 14.63 2.70 2.47 Total cost per unit $21.78 $22.00 Excess of actual cost over standard cost per unit S0.22 The production superintendent was pleased when he saw this report and commented: "This $0.22 excess cost is well within the 2 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product." Actual production for the month was 10,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Čompute the following variances for May: a. Materials price and quantity variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Materials price variance Materials quantity variance b. Labor rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Labor rate variance Labor efficiency variance c. Variable overhead rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Variable overhead rate variance Variable overhead efficiency variance 2. How much of the $0.22 excess unit cost is traceable to each of the variances computed in (1) above. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your answers to 2 decimal places.) Materials: Price variance Quantity variance 0.00 Labor: Rate variance Efficiency variance 0.00 Variable overhead: Rate variance Efficiency variance 0.00 Excess of actual over standard cost per unit $ 0.00 3. How much of the $0.22 excess unit cost is traceable to apparent inefficient use of labor time? (Input all values as positive amounts. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations. Round your final answers to 2 decimal places.) Excess of actual over standard cost per unit Less portion attributable to labor inefficiency: Labor efficiency variance Variable overhead efficiency variance 0.00 Portion due to other variances 0.00 %24 %24 Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May. Standard Actual Cost per Unit Cost per Unit Direct materials: $ 4.68 Standard: 1.80 feet at $2.60 per foot Actual: 1.75 feet at $2.80 per foot $ 4.90 Direct labor: Standard: 0.90 hours at $16.00 per hour Actual: 0.95 hours at $15.40 per hour Variable overhead: Standard: 0.90 hours at $3.00 per hour Actual: 0.95 hours at $2.60 per hour 14.40 14.63 2.70 2.47 Total cost per unit $21.78 $22.00 Excess of actual cost over standard cost per unit S0.22 The production superintendent was pleased when he saw this report and commented: "This $0.22 excess cost is well within the 2 percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product." Actual production for the month was 10,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There were no beginning or ending inventories of materials. Required: 1. Čompute the following variances for May: a. Materials price and quantity variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Materials price variance Materials quantity variance b. Labor rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Labor rate variance Labor efficiency variance c. Variable overhead rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Variable overhead rate variance Variable overhead efficiency variance 2. How much of the $0.22 excess unit cost is traceable to each of the variances computed in (1) above. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your answers to 2 decimal places.) Materials: Price variance Quantity variance 0.00 Labor: Rate variance Efficiency variance 0.00 Variable overhead: Rate variance Efficiency variance 0.00 Excess of actual over standard cost per unit $ 0.00 3. How much of the $0.22 excess unit cost is traceable to apparent inefficient use of labor time? (Input all values as positive amounts. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round intermediate calculations. Round your final answers to 2 decimal places.) Excess of actual over standard cost per unit Less portion attributable to labor inefficiency: Labor efficiency variance Variable overhead efficiency variance 0.00 Portion due to other variances 0.00 %24 %24

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