Posted: February 20th, 2021

# Variance analysis | Accounting homework help

Helix Company produces several products in its factory, including a karate robe. The company
uses a standard cost system to assist in the control of costs. According to the standards that have
PROBLEM 10–14 Comprehensive Variance Analysis [LO1, LO2, LO3]
Vitalite, Inc., produces a number of products, including a body-wrap kit. Standard variable costs
relating to a single kit are given below:
Standard Costs and Variances 453
During April, the factory worked only 760 direct labor-hours and produced 2,000 robes. The
following actual costs were recorded during the month:
Raw Material Standard Labor Time
Product X342 Y561 Sintering Finishing
Alpha8 . . . . . . . . . . . . 1.8 kilos 2.0 liters 0.20 hours 0.80 hours
Zeta9 . . . . . . . . . . . . . 3.0 kilos 4.5 liters 0.35 hours 0.90 hours
Information relating to materials purchased and materials used in production during May
follows:
Material Purchases Purchase Cost Standard Price Used in Production
X342 . . . . . . . . . . . 14,000 kilos \$51,800 \$3.50 per kilo 8,500 kilos
Y561 . . . . . . . . . . . 15,000 liters \$19,500 \$1.40 per liter 13,000 liters
The following additional information is available:
a. The company recognizes price variances when materials are purchased.
b. The standard labor rate is \$20.00 per hour in Sintering and \$19.00 per hour in Finishing.
c. During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of \$27,000,
and 2,850 direct labor-hours were worked in Finishing at a total labor cost of \$59,850.
d. Production during May was 1,500 Alpha8s and 2,000 Zeta9s.
been set for the robes, the factory should work 780 direct labor-hours each month and produce
1,950 robes. The standard costs associated with this level of production are as follows:
Total
Per Unit
of Product
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . \$35,490 \$18.20
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . \$7,020 3.60
direct labor-hours) . . . . . . . . . . . . . . . . . . . . \$2,340 1.20
\$23.00
Total
Per Unit
of Product
Direct materials (6,000 yards) . . . . . . . . . . \$36,000 \$18.00
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . \$7,600 3.80
Variable manufacturing overhead . . . . . . . \$3,800 1.90
\$23.70
At standard, each robe should require 2.8 yards of material. All of the materials purchased during
the month were used in production.
Required:
Compute the following variances for April:
1. The materials price and quantity variances.
2. The labor rate and efficiency variances.
3. The variable manufacturing overhead rate and efficiency variances

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