Reference no: EM132522934

Question - Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows:

Standard Hours Standard Rate per Hour Standard Cost 30 minutes $6.40 $3.20

During August, 10,300 hours of direct labor time were needed to make 19,600 units of the Jogging Mate. The direct labor cost totaled $64,890 for the month.

Required -

1. What is the standard labor-hours allowed (SH) to makes 19,600 Jogging Mates?

2. What is the standard labor cost allowed (SH × SR) to make 19,600 Jogging Mates?

3. What is the labor spending variance?

4. What is the labor rate variance and the labor efficiency variance?

5. The budgeted variable manufacturing overhead rate is $4.30 per direct labor-hour. During August, the company incurred $49,440 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month.