Biology Forums - Study Force

The following data for the telephone company pertain to the production of 450 rolls of telephone wire during June. Selected items are omitted because the costing records were lost in a windstorm.

   Direct Materials (all materials purchased were used.)

   Standard cost per roll:  a  kilograms at $4.00 per kilogram.
   Total actual cost:  b  kilograms costing $9,600.
   Standard cost allowed for units produced was $9,000.
   Materials rate variance:  c .
   Materials efficiency variance was $80 unfavourable.

   Direct Manufacturing Labour

   Standard cost is 3 hours per roll at $8.00 per hour.
   Actual cost per hour was $8.25.
   Total actual cost:  d .
   Labour rate variance:  e .
   Labour efficiency variance was $400 unfavourable.

Required:
Compute the missing elements in the report represented by the lettered items.

a.
Standard cost per roll   = $9,000/450 = $20.00
Standard number of kilograms per roll   = $20/$4 = 5 kilograms per roll

b.
Actual kilograms   = ($9,000 + $80)/$4 = 2,270 kilograms

c.
Materials rate variance   = $9,600 - ($9,000 + $80)
   = $520 unfavourable
d.
Total standard labour cost of actual hours   = (450 × 3 × $8) + $400 = $11,200
   Actual hours   = $11,200/$8 = 1,400
   Total actual cost   = 1,400 × $8.25 = $11,550
e.
Labour rate variance   = $11,550 - $11,200 = $350 unfavourable