Rudd Clothiers is a small company that manufactures tallmens

Rudd Clothiers is a small company that manufactures tall-men\'s suits. The company has used a standard cost accounting system. In May 2017, 11,250 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labor hours. All materials purchased were used. Cost Element Direct materials Direct labor Overhead Standard (per unit) Actual 8 yards at $4.40 per yard 1.2 hours at $13.40 per hour 1.2 hours at $6.10 per hour (fixed $3.50; variable $2.60) $375,575 for 90,500 yards ($4.15 per yard) $200,925 for 14,250 hours ($14.10 per hour) $49,000 fixed overhead $37,000 variable overhead Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $49,000, and budgeted variable overhead was $36,400. Compute the total, price, and quantity variances for (1) materials and (2) labor. (Round answers to 0 decimal places, e.g. 125.) (1) Total materials variance Materials price variance Materials quantity variance (2) Tota abor variance Labor price variance Labor quantity variance Neither favorable nor unfavorable Unfavorable Favorable Compute the total overhead variance. Total overhead variance

Solution

Answer

1 ) total material variance = standard quantity * standard price - actual quantity * actual price

= 11250 * 8 * 4.40 - 90500 * 4.15

= 20425 F

material price variance = standard price - actual price * actual quantity

= 4.40 - 4.15 * 90500

= 22625 F

material quantity variance = standard price - actual quantity * standard price

= 11250 * 8 - 90500 * 4.40

= 2200 U

2) total labor variance = standard hours * standard rate - actual hours * actual rate

= 11250 * 1.2 * 13.40 - 14250 * 14.10

= 20025 U

labor price variance = 13.40 - 14.10 * 14250

= 9975 U

labor efficiency variance = 11250 * 1.2 - 14250 * 13.40

= 7035 U

b ) total overhead variance = 14000 * 6.10 - 49000 + 37000

= 600 U