Calculate the direct labor wage rate and labor efficiency variances for each

# Calculate the direct labor wage rate and labor

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Calculate the direct labor, wage rate, and labor efficiency variances for each type of auditor and interpret. 9. Price and quantity variances for materials Medical Instruments produces a variety of electronic medical devices. Medical Instruments uses a standard cost system and computes price variances at the time of purchase. One product, a thermometer, measures patient temperatures orally. It requires a silver lead with a standard length of five inches per thermometer. To make the leads, hollow silver tubing is purchased at a standard price of \$4 per inch, cut into the required length, and then assembled into the thermometer. There was no silver tubing in inventory when a batch of 200 thermometers was scheduled for production. Twelve hundred inches of silver tubing were purchased for \$4,680 by the purchasing department for this 200-unit batch of thermometers, and 1,100 inches were used in production. Required: Compute the materials variances for silver tubing and comment on their meaning. 10. Expected, Standard, and Actual Labor Hours The Pizza Company makes two types of frozen pizzas: pepperoni and cheese. The Pizza Company allocates overhead to these two products based on the number of direct labor hours. The direct labor hours per unit for making a pepperoni pizza is 5 minutes or 1/12 of an hour. The direct labor hours per unit for making a cheese pizza is 4 minutes or 1/15 of an hour. At the start of the year the Pizza Company expected to make 12,000 pepperoni pizzas and 6,000 cheese pizzas. During the year, the Pizza Company actually made 9,000 pepperoni pizzas and 7,500 cheese pizzas. The time cards indicate that direct laborers worked for 1,300 hours. Required: What are the total expected direct labor hours, standard direct labor hours, and actual direct labor hours?
Exercises (2) Budgeting (Chapters 6,12, and 13) 14.02.2020 6 11. Overhead Variances Overhead is applied on the basis of direct labor hours. Three direct labor hours are required for each product unit. Planned production for the period was set at 8,000 units. Manufacturing overhead for the period is budgeted at \$204,000, of which 30 percent is fixed. The 26,200 hours worked during the period resulted in production of 8,500 units. Manufacturing overhead cost incurred was \$220,500. Required: Calculate the following three overhead variances: 1. Overhead volume variance 2. Overhead efficiency variance 3. Overhead spending variance

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• Fall '18
• Nursing, Registered nurse, Healthcare occupations

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