Question
Fortes Inc. has provided the following data concerning one of the products in its standard cost...
Answers
Answer
 All working forms part of the answer
 Working for data
Actual DATA for
5600
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
44810
$ 6.200
$ 277,822.00
Direct labor
3150
$ 20.60
$ 64,890.00
Variable Overhead
3150
$ 4.10
$ 12,915.00
Actual Cost = $ 355,627
Standard DATA for
5600
units
Quantity (SQ)
Rate (SR)
Standard Cost
[A]
[B]
[A x B]
Direct Material
( 8 ounces x 5600 units)=44800 ounces
$ 6.10
$ 273,280.00
Direct labor
( 0.6 hours x 5600 units)=3360 hours
$ 19.80
$ 66,528.00
Variable Overhead
( 0.6 hours x 5600 units)=3360 hours
$ 4.40
$ 14,784.00
Total Standard Cost = $ 354,592
 Requirement ‘a’
Total Production Cost Variance = Standard cost – Actual cost = 354592 – 355627
= $ 1035 Unfavourable Requirement ‘b’
Material Price Variance
(
Standard Rate

Actual Rate
)
x
Actual Quantity
(
$ 6.10

$ 6.20
)
x
44810
4481
Variance
$ 4,481.00
UnfavourableU
 Requirement ‘c’
Material Quantity Variance
(
Standard Quantity

Actual Quantity
)
x
Standard Rate
(
44800

44810
)
x
$ 6.10
61
Variance
$ 61.00
UnfavourableU
 Requirement ‘d’
Labor Rate Variance
(
Standard Rate

Actual Rate
)
x
Actual Labor Hours
(
$ 19.80

$ 20.60
)
x
3150
2520
Variance
$ 2,520.00
UnfavourableU
 Requirement ‘e’
Labour Efficiency Variance
(
Standard Hours

Actual Hours
)
x
Standard Rate
(
3360

3150
)
x
$ 19.80
4158
Variance
$ 4,158.00
FavourableF
 Requirement ‘f’
Variable Overhead Rate Variance
(
Standard Rate

Actual Rate
)
x
Actual Labor Hours
(
$ 4.40

$ 4.10
)
x
3150
945
Variance
$ 945.00
FavourableF
 Requirement ‘g’
Variable Overhead Efficiency Variance
(
Standard Hours

Actual Hours
)
x
Standard Rate
(
3360

3150
)
x
$ 4.40
924
Variance
$ 924.00
FavourableF