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At the beginning of the year, QP Company had the following standard cost sheet for one of its plastic products. QP planned to produce 500 units for the year. Direct materials (6) pounds at $2.00 per pound) $12.00 Direct labor (5 hours at $18 per hour) 90.00 Standard prime cost per unit $102.00 QP uses a standard costing system. During the year, a variable overhead rate of $4.50 per direct labor hour was used. Actual results: Actual number of units produced: 470 Materials purchased: 3,200 pounds at $2.35 per pound Materials used in production: 3,040 pounds Direct labor: 2,500 hours at $17.50 Actual variable overhead: $14,500 Compute the following variances. Remember to label your answers with an F or U. 1. Labor rate variance 2. Labor efficiency variance

At the beginning of the year, QP Company had the following standard cost sheet for one of its plastic products. QP planned to produce 500 units for the year. Direct materials (6) pounds at $2.00 per pound) $12.00 Direct labor (5 hours at $18 per hour) 90.00 Standard prime cost per unit $102.00 QP uses a standard costing system. During the year, a variable overhead rate of $4.50 per direct labor hour was used. Actual results: Actual number of units produced: 470 Materials purchased: 3,200 pounds at $2.35 per pound Materials used in production: 3,040 pounds Direct labor: 2,500 hours at $17.50 Actual variable overhead: $14,500 Compute the following variances. Remember to label your answers with an F or U. 1. Labor rate variance 2. Labor efficiency variance

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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At the beginning of the year, QP Company had the following standard cost sheet for one of its plastic products. QP planned to produce 500 units for the year. Direct materials (6 pounds at $2.00 per pound) $12.00 Direct labor (5 hours at $18 per hour) 90.00 Standard prime cost per unit $102.00 QP uses a standard costing system. During the year, a variable overhead rate of $4.50 per direct labor hour was used. Actual results: Actual number of units produced: 470 Materials purchased: 3,200 pounds at $2.35 per pound Materials used in production: 3,040 pounds Direct labor: 2,500 hours at $17.50 Actual variable overhead: $14,500 Compute the following variances. Remember to label your answers with an F or U. 1. Labor rate variance 2. Labor efficiency variance
Transcribed Image Text:At the beginning of the year, QP Company had the following standard cost sheet for one of its plastic products. QP planned to produce 500 units for the year. Direct materials (6 pounds at $2.00 per pound) $12.00 Direct labor (5 hours at $18 per hour) 90.00 Standard prime cost per unit $102.00 QP uses a standard costing system. During the year, a variable overhead rate of $4.50 per direct labor hour was used. Actual results: Actual number of units produced: 470 Materials purchased: 3,200 pounds at $2.35 per pound Materials used in production: 3,040 pounds Direct labor: 2,500 hours at $17.50 Actual variable overhead: $14,500 Compute the following variances. Remember to label your answers with an F or U. 1. Labor rate variance 2. Labor efficiency variance
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