The following data relates to Potawatomi Corporation's operations for the month. Potawatomi produced 8,500 units and the normal monthly capacity is 20,000 direct labor hours. Direct Material: Standard (5 lbs. @ $2.10/lb.) Actual (39,000 lbs. @ $2.20/lb.) Standard Unit Costs Total Actual Costs $10.50 $85,800 Direct Labor: Standard (2 hrs. @ $12/hr.) $24.00 Actual (18,000 hrs. @ $11.90/hr.) $214,200 Variable Overhead: Standard (2 hrs. @ $4.00/hr.) $8.00 Actual $69,700 Total $42.50 $369,700 Use fork diagrams to calculate the following variances: b. Materials efficiency variance a. Materials price variance C. Labor rate variance e. Variable overhead spending variance f. Variable overhead efficiency variance d. Labor efficiency variance

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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The following data relates to Potawatomi Corporation's operations for the month. Potawatomi produced
8,500 units and the normal monthly capacity is 20,000 direct labor hours.
Direct Material:
Standard (5 lbs. @ $2.10/lb.)
Actual (39,000 lbs. @ $2.20/lb.)
Standard
Unit Costs
Total
Actual Costs
$10.50
$85,800
Direct Labor:
Standard (2 hrs. @ $12/hr.)
$24.00
Actual (18,000 hrs. @ $11.90/hr.)
$214,200
Variable Overhead:
Standard (2 hrs. @ $4.00/hr.)
$8.00
Actual
$69,700
Total
$42.50
$369,700
Use fork diagrams to calculate the following variances:
b. Materials efficiency variance
a.
Materials price variance
C.
Labor rate variance
e.
Variable overhead spending variance
f.
Variable overhead efficiency variance
d. Labor efficiency variance
Transcribed Image Text:The following data relates to Potawatomi Corporation's operations for the month. Potawatomi produced 8,500 units and the normal monthly capacity is 20,000 direct labor hours. Direct Material: Standard (5 lbs. @ $2.10/lb.) Actual (39,000 lbs. @ $2.20/lb.) Standard Unit Costs Total Actual Costs $10.50 $85,800 Direct Labor: Standard (2 hrs. @ $12/hr.) $24.00 Actual (18,000 hrs. @ $11.90/hr.) $214,200 Variable Overhead: Standard (2 hrs. @ $4.00/hr.) $8.00 Actual $69,700 Total $42.50 $369,700 Use fork diagrams to calculate the following variances: b. Materials efficiency variance a. Materials price variance C. Labor rate variance e. Variable overhead spending variance f. Variable overhead efficiency variance d. Labor efficiency variance
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