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# Comprehensive Variance Analysis: Vitalite, Inc Productions

Vitalite, Inc. produces a number of products, including a body-wrap kit. Standard variable costs relating to a single kit are given below:

Standard Quantity Standard Price Standard
Or Hours or rate cost
Direct Materials........... ? \$6 per yard \$?
Direct Labor.................. ? ? ?
Variable manufacturing OH ? \$2 per direct ?
Labor hour
Total standard cost per kit................... \$42

During August, 500 kits were manufactured and sold. Selected information relating to the month's production is given below:
Materials used Direct Labor Variable Manufacturing OH
Total standard cost................. ? \$8000 \$1,600
Actual costs incurred.............. \$10,000 ? \$1,620
Materials price variance......... ?
Materials quantity variance... \$600 U
Labor rate variance................. ?
Labor efficiency variance...... ?
Variable OH spending variance.. ?
Variable OH efficiency variance.. ?
*For the month's production.

The following additional information is available for August's production of kits:

Actual direct labor hours............ 900
Difference between standard and actual cost per kit produced during August \$0.14 U

1. What is the total standard cost of the materials used during August?
2. How many yards of material are required at standard per kit?
3. What was the materials price variance for August?
4. What is the standard direct labor rate per hour?
5. What was the labor rate variance for August? The labor efficiency variance?
6. What was the variable overhead (OH) spending variance for August? The variable overhead efficiency variance?
7. Complete the standard cost card for one kit shown at the beginning of the problem.

#### Solution Summary

The solution explains the calculation of material, labor and overhead variances in an attached Excel spreadsheet.

\$2.19