[marissaann]

Hi... I took a quiz and got some answers on it wrong and don't know what the correct answers should be... I was wondering if someone could help. Thanks!

Question 1: Stench food company uses a standard cost system to collect costs related to the production of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce. During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of $171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt. What is Stench’s materials quantity variance for the month of June?

My answer: $15,640 Unfavorable


Question 2: Question 2: Holiday Chemical Company uses a standard cost system to collect costs related to the production of its bowling ball fruitcakes. The direct labor standard for each fruitcake is 1.25 hours at a standard cost of $11.00 per hour. During the month of November, Holiday’s fruitcake production used 9820 direct labor hours at a total direct labor cost of $103547. This resulted in production of 8500 fruitcakes for November. What is Holiday’s labor efficiency variance for November?

My answer: $14,520 Unfavorable

Question 3: The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output 3.2 hours; standard variable overhead rate of $12.70 per hour. The following data pertain to operations from last month: Actual Hours are 1600 hours; actual total variable overhead cost $19600; actual output 400 units. What is the variable overhead efficiency variance for the month?

My answer: $3,920 Unfavorable

Thanks so much again!

[pshiremath_21763]

Hi, I had shown the detailed workings.

Question 1:
Answer - $15,640 Unfavorable

Question 2:
Answer - $8,855 Favorable

Labor efficiency variance = Std rate [Std hours for actual production - Actual hours]
Labor efficiency variance = $11 [ (1.25 hours * 8500 fruitcakes) - 9820 hours]
Labor efficiency variance = $11 [10,625 hours - 9820 hours]
Labor efficiency variance = $8,855 Favorable
since, the actual hours taken for production are less than Standard hours allowed, it is favorable.

Question 3:
Answer - $4,064 Unfavorable

Variable overhead efficiency variance = (actual labor-hours - standard labor hours allowed for actual production) x standard variable overhead rate

Variable overhead efficiency variance = (1600 hours - [3.2 hours * 400 units]) * $12.70 Per hour

Variable overhead efficiency variance = (1600 hours - 1280 hours) * $12.70 Per hour

Variable overhead efficiency variance = $4,064 Unfavorable

since, the actual hours taken for production are more than Standard hours allowed, it is unfavorable.