Flann Kunzangs, LLC is a small manufacturer of a yard decor. The following information pertains to Q2’s production of their very popular concrete gnome. Variable and fixed overhead are applied based on Direct Labor Hours Standards Material: 2.3 pounds per Unit @ $4 per pound Labor: 2 hours per Unit @ $13.5 per hour Variable OH: 2 hours per Unit

Sep 8, 2023

Flann Kunzangs, LLC is a small manufacturer of a yard decor.  The following information pertains to Q2’s production of their very popular concrete gnome.
Variable and fixed overhead are applied based on Direct Labor Hours
Standards
Material: 2.3 pounds per Unit @  $4 per pound
Labor: 2 hours per Unit @  $13.5 per hour
Variable OH: 2 hours per Unit @  $3 per hour
Fixed OH: 2 hours per Unit @  $0.75 per hour*
*based on budgeted production of  12,700 Units
Actuals
Production: 13,000 Units produced during the month
Material: 29,200 pounds purchased and used @ $3.85 per pound
Labor: 26,200 direct labor hours @ $13.6 per hour
Variable OH: $75,680
Fixed OH: $19,450
 
Determine the following:
1.  Material price variance
2.  Material usage (quantity) variance
3.  Labor rate variance
4.  Labor efficiency variance
5.  Variable overhead spending variance
6.  Variable overhead usage variance
7.  Fixed overhead spending variance
8.  Fixed overhead volume variance

Recent Posts