The Sudbury South Carolina plant of Shannon Sports Company h

The? Sudbury, South? Carolina, plant of Shannon Sports Company has the following standards for its soccer ball? production:

Standards:

0.1 yard

Material (leather) per soccer ball

$21

Material price per yard

0.40 Hour

Direct labor hours per soccer ball

$11 per hour

Wage rate per direct labor hour

$12 per direct labor hour

Variable support cost rate

Actual results for October:

Used 13500 yards of raw material, purchased for $280,530.00.

Paid for 8,200 direct labor hours at $11.30 per hour.

Incurred $82,000 of variable support costs

Manufactured 25,000 soccer balls

Requirements

Determine the following variances for? October:

?(a)

Total direct material cost variance and indicate whether the variance is favorable or unfavorable

?(b)

Total direct labor cost variance

?(c)

Total variable support cost variance

?(d)

Direct material price variance

?(e)

Direct material quantity variance

?(f)

Direct labor rate variance

?(g)

Direct labor efficiency variance

?(h)

Variable support rate variance

?(i)

Variable support efficiency variance

AH? = Actual number of direct labor hours

AP? = Actual price per unit of materials

AQ? = Actual quantity of materials used

AR? = Actual wage rate

SH? = Number of direct labor hours allowed given the level of output achieved

SP? = Estimated or standard price per unit of materials

SQ? = Standard quantity of materials allowed for the production level achieved

SR? = Standard wage rate

Standards:	0.1 yard
Material (leather) per soccer ball	$21
Material price per yard	0.40 Hour
Direct labor hours per soccer ball	$11 per hour
Wage rate per direct labor hour	$12 per direct labor hour
Variable support cost rate
Actual results for October:
Used 13500 yards of raw material, purchased for $280,530.00. Paid for 8,200 direct labor hours at $11.30 per hour. Incurred $82,000 of variable support costs Manufactured 25,000 soccer balls

Solution

Standard Actual Particulars Qty/ hours Rate amount Qty/ hours Rate amount Materials              2,500.00                    21.00                   52,500.00                  13,500.00                    20.78         280,530.00 Labour            10,000.00               11.0000                 110,000.00                     8,200.00                    11.30            92,660.00 Overhead            10,000.00                    12.00                 120,000.00                     8,200.00               10.0000            82,000.00 Actual output            25,000.00 Materials reqd (25000*.1)              2,500.00 Labour hrs reqd (25000*.4)            10,000.00 Direct material cost variance = Standard cost - Actula Cost Direct material cost variance = 52500 - 280530 Direct material cost variance = 228,030 U Direct labour cost variance = Standard labour cost - Actual labour cost Direct labour cost variance = 110,000 - 92,660 Direct labour cost variance = 17,340 F variable support cost variance = Standard cost - Actual cost variable support cost variance = 120,000 - 82,000 variable support cost variance = 38,000 F DMPV = (SP-AP)*AQ purchased DMPV = (21 - 20.78)13500 DMPV = 2970 F DMQV= (SQ-AQ)SP DMQV= (2500 - 13500)21 DMQV= 231,000 U DLRV= (SR-AR)AH DLRV= (11 - 11.30)8200 DLRV= 2,460 U DLEV = (SH-AH)SR DLEV = (10000 - 8200)11 DLEV = 19,800 F VSRV = (SR-AR)AH VSRV = (12 - 10)8200 VSRV = 16,400F VSEV = (SH-AH)SR VSEV = (10,000 - 8200)12 VSEV = 21,600F