Reference no: EM133030298

Questions -

Q1. The standard cost of product 5252 includes 1.90 hours of direct labor at $11.50 per hour. The predetermined overhead rate is $22.00 per direct labor hour. During July, the company incurred 4,000 hours of direct labor at an average rate of $11.70 per hour and $82,300 of manufacturing overhead costs. It produced 2,000 units.

(a) Compute the total, price, and quantity variances for labor.

(b) Compute the total overhead variance (show computation)

Q2. Monty, Inc. is trying to establish the standard labor cost of a typical oil change. The following data have been collected from time and motion studies conducted over the past month.

Actual time spent on the oil change 1 hour

Hourly wage rate $14

Payroll taxes 10% of wage rate

Setup and downtime 17% of actual labor time

Cleanup and rest periods 23% of actual labor time

Fringe benefits 25% of wage rate

a. Determine the standard direct labor hours per oil change.

b. Determine the standard direct labor hourly rate.

c. Determine the standard direct labor cost per oil change.

d. If an oil change took 1.5 hours at the standard hourly rate, what was the direct labor quantity variance?