Hans Enterprises is a major bird feed producer. In June, the company produced 160 batches of crow bait. Each batch weighs 1,000 pounds. To produce this amount of output, the company purchased and used 170,000 pounds of direct materials at a cost of $816,000. It also incurred $20,000 in direct labor costs for the 2,500 hours worked by employees on the crow decoy crew. General production expense at the crow bait factory in June total $4,200, of which $3,100 was considered fixed. Hans' standard cost information for each 1,000 pound lot of crow bait is as follows.

Direct materials standard price		5.00	per pound
Standard quantity allowed per lot		1.025	pound
Direct labor standard rate		8.25	hourly
Standard hours allowed per group		15.00	direct working hours
Fixed overhead budget		3.300	her is
Normal production level		150	monthly parties
Variable overhead application rate		10.00	per party
Fixed overall application rate (3,300 ÷ 150 lots)		22.00	per party
Total overall application rate		32.00	per party

Instructions

A. Calculate material price and quantity variances.

Material price differences: 34000

Material quantity differences: (30000)

B. Calculate the labor rate and productivity variances.

Labor rate variances: 625

Efficiency differences: (825)

C. Calculate production overhead expenses and volume variances.

Overhead differences: 700

Overhead volume variances: 220

D. What might have caused these differences? Who can be responsible? What questions does this raise, and who can get the answers?

Answer rating: 100% (QA)

A Material price variance Standard cost per pound of material 5 00 Actual cost per pound of material 816 000 170 000 4 80 Material price difference Actual price Standard price x Actual quantity purcha View the full answer