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Compute Hansenko material Reynolds variable overhead variance


? Hansenko Company manufactures 100-pound bags of fertilizer that have the following unit standard costs for direct materials and direct labor:
 Direct materials (100 lbs. @ $1.00 per lb.)$100.00
 Direct labor 12.00  (0.5 hours at $24 per hour)
 Total standard direct cost per 100 lb. bag$112.00

The following activities were recorded for October:
 1,000 bags were manufactured.
 95,000 lbs. of materials costing $76,000 were purchased.
 102,500 lbs. of materials were used.
 $12,000 was paid for 475 hours of direct labor

There were no beginning or ending work-in-process inventories

a. Compute the direct materials variances.
b. Compute the direct labor variances.
c. Give possible reasons for the occurrence of each of the preceding variance

? Reynolds Manufacturing Company has the following information pertaining to a normal monthly 10,000 units of:

Standard factory overhead rates are based on a normal monthly volume of one standard direct hour per unit.

Standard factory overhead rates per direct labor hour are:
Fixed $ 6.00
Variable 10.00 $16.00
Units actually produced in current month 9,000 units

Actual factory overhead costs incurred (includes $70,000 fixed) $156,000

Actual direct labor hours 9,000 hours

What is the variable overhead spending variance for Reynolds?

Solution Summary

The expert computes Hansenko material Reynolds variable overhead variances.