Upton Company Uses a Standard Cost System for Its Single

question 6

Essay

Upton Company uses a standard cost system for its single product. The following data are available:
Actual experience for the current year:
$$\begin{array} { l c } \text { Purchases of raw materials } ( 15,000 \text { yards at } \$ 13 \text { per yard } ) & \$ 195,000 \\\text { Raw materials used } & 12,000 \text { yards } \\\text { Direct labor costs } ( 10,200 \text { hours at } \$ 10 \text { per hour } ) & \$ 102,000 \\\text { Actual variable overhead cost } & \$ 84,150 \\\text { Units produced } & 12,600 \text { units }\end{array}$$
Standards per unit of product:
$$\begin{array} { | l | l | } \hline \text { Raw materials } & 1.1 \text { yards at } \$ 15 \text { per yard } \\\hline \text { Direct labor } & 0.80 \text { hours at } \$ 9.50 \text { per hour } \\\hline \text { Variable overhead } & \$ 8 \text { per direct labor hour } \\\hline\end{array}$$
Required:
Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase:
a. Direct materials price variance.
b. Direct materials quantity variance.
c. Direct labor rate variance.
d. Direct labor efficiency variance.
e. Variable overhead rate variance.
f. Variable overhead efficiency variance.

---

Definitions:

Accounting Equation

The fundamental equation of accounting stating that assets equal liabilities plus equity (Assets = Liabilities + Equity).

Opportunities in Accounting

The various career paths and growth prospects available within the field of accounting.

Private Accounting

A field of accounting that involves working within a company to process financial transactions, manage financial records, and prepare internal financial reports.

Public Accounting

The field of accounting that involves providing assurance, tax, and consulting services to the public, typically performed by certified public accountants (CPAs).