Question

Variance Analysis
Insert a formula into each cell marked with a "?". For the variances indicate whether they are favorable or unfavorable
Bradley Company produces a garden statue which requires the following variable manufacturing costs:
			Std Qty		Std Price/Rate
Direct material (mix)			6	lbs	0.06	per lb
Direct labor			1	hours	$16	per hour
Variable O/H (based on direct labor hours)			1	hours	$8.30	per hour
Standard Cost per Unit:
	Standard Cost
Direct Material	?
Direct Labor	?
Variable O/H	?
Total Std Cost per Unit	?
Bradley incurred the following variable production costs in February:
Units produced	500
	Actual Qty		Actual Price/Rate		Actual Cost
Direct materials	2880	lbs	$0.07	per lb	?
Direct labor	475	hours	$15.00	per hour	?
Variable O/H	475	hours	$8.00	per hour	?
Total Actual cost					?
Variance Calculations
Total Variance
Standard -	Actual =		Variance
?	?		?
Direct Material Variances
Total
Standard -	Actual =		Variance
?	?		?
Price
Difference in price x	Actual Qty =		Variance
?	?		?
Quantity
Difference in quantity x	Standard Price =		Variance
?	?		?
Direct Labor Variances
Total
Standard -	Actual =		Variance
?	?		?
Rate
Difference in price x	Actual Qty =		Variance
?	?		?
Efficiency
Difference in quantity x	Standard Price =		Variance
?	?		?
Variable O/H Variances
Total
Standard -	Actual =		Variance
?	?		?
Rate
Difference in price x	Actual Qty =		Variance
?	?		?
Efficiency
Difference in quantity x	Standard Price =		Variance
?	?		?

Answer 1

Answer
Standard Cost PER UNIT	Standard Qty	Standard Rate	Standard Cost
			(Qty*Rate)
Direct Material	6	0.06	0.36
Direct Labour	1	16	16
Variable O/H	1	8.3	8.3
Total Standard Cost			24.66
Actual Production Cost in the month February	500 units
Total Actual Cost	Actual Qty	Actual Rate	Actual Cost
			(Qty*Rate)
Direct Material	2880	0.07	201.6
Direct Labour	475	15	7125
Variable O/H	475	8	3800
Total Actual Cost			11,127
Standard Production Cost in the month February	500 units
Total Standard Cost	Standard Qty on Actual Units	Standard Rate	Standard Cost
	(No. of units*Qty)		(Qty*Rate)
Direct Material	3000	0.06	180
	(500*6)
Direct Labour	500	16	8000
	(500*1)
Variable O/H	500	8.3	4150
	(500*1)
Total Standard Cost			12,330
Variance for 500 units	Actual Cost-Standard Cost
	12330-11127
	1203
Direct Material Variances
Total	Actual - Standard
	201.6-180
	21.6
Price Variance	Actual-Standard
	0.07-0.06
	0.01
Total Price Variance for 500 units	0.01*500
	5
Quantity Variance	Actual-Standard
	2880-3000
Total Qty Variance for 500 units	-120
Per unit Variance in qty of Material
Actual Qty	2880/500	5.76
Standard Qty	3000/500	6
Variance per unit		-0.24
Direct Labour Variance
Total	Actual - Standard
	7125-8000
	-875
Price Variance	15-16
	-1
For 500 units	-500
Qty/Efficiency Varaince
Actual Qty	475/500=	0.95
Standard Qty	500/500=	1
Qty/Efficiency Variance per unit	0.95-1
	-0.05
For 500 units	-25
Variable Overhead Variance
Total	Actual - Standard
	3800-4150
	-350
Price/Rate Varaiance (per unit)	8-8.3
	-0.3
For 500 units	-150
Qty/Efficiency Variance
Actual Qty	475/500=	0.95
Standard Qty	500/500=	1
Qty/Efficiency Variance per unit	0.95-1
	-0.05
For 500 units	-25