In: Accounting
The standards for one case of liquid weed killer are as follows: |
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Direct materials | 6 | lb | @ | $ | 7.5 | /lb |
Direct labor | 3.6 | hr | @ | $ | 16 | /hr |
Variable overhead (based on machine hours) | 1.2 | hr | @ | $ | 5.5 | /hr |
During the week ended
May 6, the following activity took place:
4,332 machine hours were worked.
23,028 lb of raw material were purchased for inventory at a total cost of $176,164.
3,800 cases of finished product were produced.
22,683 lb of raw material were used.
13,379 labor hours were worked at an average rate of $16.25 per hour.
$23,003 actual variable overhead costs were incurred.
Required:
Calculate each of the following variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
|
Actual DATA for |
3800 |
units |
|
Quantity (AQ) |
Rate (AR) |
Actual Cost |
|
Direct Material |
22683 |
$ 7.650 |
$ 173,524.75 |
Direct labor |
13379 |
$ 16.25 |
$ 217,408.75 |
Variable Overhead |
4332 |
$ 5.31 |
$ 23,003.00 |
Standard DATA for |
3800 |
units |
|
Quantity (SQ) |
Rate (SR) |
Standard Cost |
|
[A] |
[B] |
[A x B] |
|
Direct Material |
( 6 lbs x 3800 units)=22800 lbs |
$ 7.50 |
$ 171,000.00 |
Direct labor |
( 3.6 hours x 3800 units)=13680 hours |
$ 16.00 |
$ 218,880.00 |
Variable Overhead |
( 1.2 hours x 3800 units)=4560 hours |
$ 5.50 |
$ 25,080.00 |
Material Price Variance |
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( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity purchased |
( |
$ 7.50 |
- |
$ 7.65 |
) |
x |
23028 |
-3454 |
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Variance |
$ 3,454.00 |
Unfavourable-U |
Material Quantity Variance |
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( |
Standard Quantity |
- |
Actual Quantity |
) |
x |
Standard Rate |
( |
22800 |
- |
22683 |
) |
x |
$ 7.50 |
877.5 |
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Variance |
$ 877.50 |
Favourable-F |
Labor Rate Variance |
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( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Labor Hours |
( |
$ 16.00 |
- |
$ 16.25 |
) |
x |
13379 |
-3344.75 |
||||||
Variance |
$ 3,344.75 |
Unfavourable-U |
Labour Efficiency Variance |
||||||
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
13680 |
- |
13379 |
) |
x |
$ 16.00 |
4816 |
||||||
Variance |
$ 4,816.00 |
Favourable-F |
Variable Overhead Rate Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Labor Hours |
( |
$ 5.50 |
- |
$ 5.31 |
) |
x |
4332 |
823 |
||||||
Variance |
$ 823.00 |
Favourable-F |
Variable Overhead Efficiency Variance |
||||||
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
4560 |
- |
4332 |
) |
x |
$ 5.50 |
1254 |
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Variance |
$ 1,254.00 |
Favourable-F |
Price variance for raw materials purchased. |
$ 3,454.00 |
Unfavourable-U |
Raw materials usage variance. |
$ 877.50 |
Favourable-F |
Direct labor rate variance. |
$ 3,344.75 |
Unfavourable-U |
Direct labor efficiency variance. |
$ 4,816.00 |
Favourable-F |
Variable overhead spending variance. |
$ 823.00 |
Favourable-F |
Variable overhead efficiency variance. |
$ 1,254.00 |
Favourable-F |