Question

In: Accounting

The Chair Company produces chairs and has determined the following direct cost categories and budgeted amounts:...

The Chair Company produces chairs and has determined the following direct
cost categories and budgeted amounts:
Standard Inputs Standard Cost
for 1 output per input
Direct Materials 1.00 $7.50
Direct Labor 0.30 $9.00
Direct Marketing 0.50 $3.00
Actual performance for the company is shown below:
Actual output: (in units) 4,000
Direct Materials:
Materials costs $30,225
Input purchased and used 3,900
Actual price per input $7.75
Direct Manufacturing Labor:
Labor costs $11,470
Labor-hours of input 1,240
Actual price per hour $9.25
Direct Marketing Labor:
Labor costs $5,880
Labor-hours of input 2,100
Actual price per hour $2.80
3
a. What is the flexible-budget variance of the direct materials? Is it F or U?
b. What is the flexible-budget variance of the direct manufacturing labor? Is it F or U?
c. What is the flexible-budget variance of the direct marketing labor? Is it F or U?
d. What is the price variance of the direct materials? Is it F or U?
e. What is the price variance of the direct manufacturing labor? Is it F or U?
f. What is the price variance of the direct marketing labor? Is it F or U?
g. What is the efficiency variance for the direct materials? Is it F or U?
h. What is the efficiency variance for the direct manufacturing labor? Is it F or U?
i. What is the efficiency variance for the direct marketing labor? Is it F or U?

Solutions

Expert Solution

3a)Standard material cost allowed for actual output =Actual output * SQ*SR

                           = 4000*1* 7.5

                           = 30000

flexible-budget variance of the direct materials = Actual Material cost- Standard material cost alllowed for actual output

          = 30225 -30000

          = 225 U

b)Standard manufacturing labor cost allowed for actual output = Actual output *SH*SR

            = 4000 * .30 *9

            = 10800

flexible-budget variance of the direct manufacturing labor =Actual manufacturingLabor cost - Standard manufacturing labor cost allowed for actual output

                     = 11470- 10800

                      = 670 U

C)

Standard marketing labor cost allowed for actual output = Actual output *SH*SR

                         = 4000* .50 *3

                          = 6000

flexible-budget variance of the direct marketing labor = Actual marketing labor cost- Standard marketing labor cost allowed for actual output

                 = 5880-6000

                = - 120 F (enter as 120 F if needs to be entered as positive value)

d)

price variance of the direct materials =AQ [AR-SR]

                   = 3900 [7.75 7.50 ]

                  = 3900 * .25

                 = 975 U

ekkarill92 answered 1 year ago
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