Question
In: Accounting
Cato Band Uniforms uses a standard costing system. The standard material and labor costs for producing...
Cato Band Uniforms uses a standard costing system. The
standard material and labor costs for producing a marching band hat
are as follows:
Materials (0.90 yards × $12.00) $10.80
Direct labor (1.20 hours × $14.10) $16.92
During May, the company produced 3,800 band hats; 3,840 yards
of material were purchased for $41,472, and 3,050 yards of material
were used in production. Also during May, 4,460 direct labor hours
were worked at a cost of $53,520. Calculate material price and
quantity variances and labor rate and efficiency variances.
Indicate whether the variances are favorable or unfavorable. (Round
intermediate calculations to 2 decimal places, e.g. 15.25 and final
answers to 0 decimal places, e.g. 125. Enter all variances as a
positive number.)
Material Price Variance $
FavorableNeither Unfavorable nor FavorableUnfavorable
Material Quantity Variance $
UnfavorableNeither Unfavorable nor FavorableFavorable
Labor Rate Variance $
FavorableUnfavorableNeither Unfavorable nor Favorable
Labor Efficiency Variance $
FavorableUnfavorableNeither Unfavorable nor Favorable
Solutions
Expert Solution
- [1]
|
Material Price Variance |
||||||
|
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity |
|
( |
$ 12.00 |
- |
$ 10.80 |
) |
x |
3840 |
|
4608 |
||||||
|
Variance |
$ 4,608.00 |
Favourable-F |
||||
OR
|
Material Price Variance |
||||||
|
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity used |
|
( |
$ 12.00 |
- |
$ 10.80 |
) |
x |
3050 |
|
3660 |
||||||
|
Variance |
$ 3,660.00 |
Favourable-F |
||||
- [2]
|
Material Quantity Variance |
||||||
|
( |
Standard Quantity |
- |
Actual Quantity |
) |
x |
Standard Rate |
|
( |
3420 |
- |
3050 |
) |
x |
$ 12.00 |
|
4440 |
||||||
|
Variance |
$ 4,440.00 |
Favourable-F |
||||
- [3]
|
Labor Rate Variance |
||||||
|
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Labor Hours |
|
( |
$ 14.10 |
- |
$ 12.00 |
) |
x |
4460 |
|
9366 |
||||||
|
Variance |
$ 9,366.00 |
Favourable-F |
||||
- [4]
|
Labour Efficiency Variance |
||||||
|
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
|
( |
4560 |
- |
4460 |
) |
x |
$ 14.10 |
|
1410 |
||||||
|
Variance |
$ 1,410.00 |
Favourable-F |
||||
- Workings
|
Actual DATA for |
3800 |
units |
|
|
Quantity (AQ) |
Rate (AR) |
Actual Cost |
|
|
Direct Material |
3050 |
$ 10.80 |
$ 32,940.00 |
|
Direct labor |
4460 |
$ 12.00 |
$ 53,520.00 |
|
Standard DATA for |
3800 |
units |
|
|
Quantity (SQ) |
Rate (SR) |
Standard Cost |
|
|
[A] |
[B] |
[A x B] |
|
|
Direct Material |
( 0.9 yards x 3800 units)=3420 yards |
$ 12.00 |
$ 41,040.00 |
|
Direct labor |
( 1.2 hours x 3800 units)=4560 hours |
$ 14.10 |
$ 64,296.00 |
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