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Problem - Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials (clay)
1.70 lbs.
$1.80 per lb.
$3.06
Direct labor
1.70 hrs.
$12.00 per hr.
20.40
Variable manufacturing overhead (based on direct labor hours)
$1.10 per hr.
1.87
Fixed manufacturing overhead ($425,500.00 ÷ 185,000.00 units)
2.30
Barley Hopp had the following actual results last year:
Number of units produced and sold
190,000.00
Number of pounds of clay used
348,200.00
Cost of clay
$661,580.00
Number of labor hours worked
235,000.00
Direct labor cost
$3,901,000.00
Variable overhead cost
$370,000.00
Fixed overhead cost
$415,000.00
Required -
1. Calculate the direct materials price, quantity, and total spending variances for Barley Hopp.
2. Calculate the direct labor rate, efficiency, and total spending variances for Barley Hopp.
3. Calculate the variable overhead rate, efficiency, and total spending variances for Barley Hopp.
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