Question

Calculate total sales mix variance, Direct Materials Variance Price, Direct Materials Variance Efficiency, Dircet Labor Variance Rate & Efficiency, Variable overhead variance spending, and Selling and General Admin Variance.

Scooter's Inc Summary of Standard Costs
Summary of Standard Costs		Deluxe	Beginner
Assembly kit per scooter		$               400	$         200
Direct labor hours per scooter		3	1
Direct labor rate per hour		$                  25	$           15
Variable overhead rate per scooter		$                  35	$           35
Sales Price
		2017	2018
Deluxe		$               900	$         900
Beginner		$                350	$         350
Sales Mix Percent
		2017	2018
Deluxe		80%	50%
Beginner		20%	50%
Total Assembled & Sold		6,800	6,800
Scooter's Inc
Summary of Actual Costs
Deluxe		2017	2018
Assembly kits:	Used	5,440	3,425
	Price per kit	$               400	$         500
Direct labor hours		16,320	10,275
Direct labor rate per hour		$                  25	$           27
Variable overhead per scooter		$                  35	$           38
Beginner		2017	2018
Assembly kits:	Used	1,360	3,460
	Price per kit	$                200	$         175
Direct labor hours		1,360	3,460
Direct labor rate per hour		$                  15	$           20
Variable overhead per scooter		$                  35	$           41
Director salaries		$         400,000	$ 275,000

Answer 1

SALES MIX VARIANCE
SALES MIX VAIRANCE IS VARIANCE WHICH ARISES DUE TO CHANGE IN STANDARD MIX WITH RESPECT TO
ACTUAL MIX
PRODUCT DELUXE				2017	2018	VARIANCE
SALES				4896000	3060000	-1836000
SALE PRICE x MIX PERCENTAGExRATE
PRODUCT BEGINER
SALES
SALE PRICE x MIX PERCENTAGExRATE				476000	1190000	714000
TOTAL SALES MIX VARIANCE						-1122000	ADVERSE
DIRECT MATERIAL VARAINCE PRICE
VARIANCE = ACTUAL COST OF MATERIAL - ACTUAL COST OF MATERIAL AT STANDARD PRICE
						2017	2018
ACTUAL COST OF MATERIAL DELUXE
ACTUAL CONSUMPTION x ACTUAL PRICE						2176000	1712500
ACTUAL CONSUMPTION x STANDARD PRICE						2176000	1370000
ACTUTAL COST OF BEGINER
ACTUAL CONSUMPTION x ACTUAL PRICE						272000	605500
ACTUAL CONSUMPTION x STANDARD PRICE						272000	692000
TOTAL ACTUAL COST OF MATERIAL						2448000	2318000
TOTAL COST OF MATERIAL AT STANDARD RATE						2448000	2062000
VARIANCE							256000	ADVERSE
DIRECT MATERIAL VARIANCE EFFICIENCY
VARIANCE = COST OF MATERIAL CONSUMED FOR ACTUAL OUTPUT AT STANDARD COST - COST OF MATERIAL CONSUMED AT STANDARD COST
MATERIAL COST AT STANDARD RATE						2017	2018
TOTAL COST OF MATERIAL AT STANDARD RATE						2448000	2318000
STANDARD COST OF ACTUAL OUTPUT
ACTUAL OUTPUT				6800
STANDARD COST DELUXE						2176000	1360000
STANDARD COST BEGINER						272000	680000
						2448000	2040000
							278000	ADVERSE
DIRECT LABOUR PRICE
VARIANCE = ACTUAL COST OF LABOUR - ACTUAL COST OF LABOUR AT STANDARD PRICE
						2017	2018
ACTUAL LABOUR COST DELUXE						408000	277425
ACTUAL LABOUR COST BEGINER						20400	69200
						428400	346625
ACTUAL LABOUR COST AT STANDARD RATE
DELUXE						408000	256875
BEGINER						20400	51900
						428400	308775
VARIANCE							37850	ADVERSE
DIRECT LABOUR EFFICIENCY VARIANCE
VARIANCE = ACTUAL COST OF LABOUR AT STANDARD PRICE - STANDARD COST OF LABOUR
ACTUAL LABOUR COST AT STANDARD RATE
DELUXE						408000	256875
BEGINER						20400	51900
						428400	308775
STANDARD COST OF LABOUR
STANDARD COST OF DELUXE						408000	255000
STANDARD COST OF BEGINER						20400	51000
						428400	306000
VARIANCE							2775	ADVERSE
DIRECT VARIABLE OVERHEAD PRICE
VARIANCE = ACTUAL COST OF VARIABLE OVERHEAD - ACTUAL COST OF VARIABLE OVERHEAD AT STANDARD PRICE
						2017	2018
ACTUAL VARIABLE OVERHEAD COST DELUXE						571200	390450
ACTUAL VARIABLE OVERHEAD COST BEGINER						47600	141860
						618800	532310
ACTUAL VARIABLE OVERHEAD COST AT STANDARD RATE
DELUXE						571200	359625
BEGINER						47600	121100
						618800	480725
VARIANCE							51585	ADVERSE
DIRECT VARIABLE OVERHEAD EFFICIENCY VARIANCE
VARIANCE = ACTUAL COST OF VARIABLE OVERHEAD AT STANDARD PRICE - STANDARD COST OF VARIABLE OVERHEAD
ACTUAL VARIABLE OVERHEAD COST AT STANDARD RATE
DELUXE						571200	359625
BEGINER						47600	121100
						618800	480725
STANDARD COST OF VARIABLE OVERHEAD
STANDARD COST OF DELUXE						571200	357000
STANDARD COST OF BEGINER						47600	119000
						618800	476000
VARIANCE							4725	ADVERSE
SINCE STANDARD FIXED SELLING AND ADMINSTRATION OVERHEADS ARE NOT GIVEN FINDING VARIANCE IS NOT POSSIBLE
YEAR TO YEAR VARIANCE WILL BE $ 400000- $ 275000 = $125000 FAVOURABLE