Miguez Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price
Question:
Miguez Corporation makes a product with the following standard costs:
Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||
---|---|---|---|---|---|
Direct materials | 2.3 | liters | $ 7.00 | per liter | $ 16.10 |
Direct labor | 0.7 | hours | $ 22.00 | per hour | $ 15.40 |
Variable overhead | 0.7 | hours | $ 2.00 | per hour | $ 1.40 |
The company budgeted for production of 2,600 units in September, but actual production was 2,500 units. The company used 5,440 liters of direct material and 1,680 direct labor-hours to produce this output. The company purchased 5,800 liters of the direct material at $7.20 per liter. The actual direct labor rate was $24.10 per hour and the actual variable overhead rate was $1.90 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for September is:
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer