Question

cost accounting 5ed chapter 16 exercise 66; chart in excel format prepare a report that shows all variable production cost price and efficiency variances and fixed production cost price and production volume variances excel format

Units produced (actual) 42000

Master production Budget

Direct materials $132,000 Direct labor 112000 Overhead 159200

Standard costs per unit

Direct materials $1.65x2 gallons per unit of output Direct labor $14 per hour x 0.2 hour per unit Variable overhead $11.90 per direct labor hour

Actual costs

Direct materials purchased and used $150,960 (81,600 gallons) Direct labor 111,708 (8,560) Overhead 163,200 (61% is variable)

Answer 1

Direct material variances
Particulars	Amount
Standard price per unit of raw material	$              1.65
Less: actual price per unit of raw material	$              1.85
Price variance per unit of raw material	$            (0.20)
× units of raw materials purchased	81,600
Direct material price variance	$ (16,320.00)
Particulars	Per one unit of output	× actual output	Total
Standard raw materials units required per unit of output	2.00	42,000.00	84,000.00
Less: actual raw materials units used per unit of output			81,600.00
Difference in raw materia units used			2,400.00
× standard price per unit of raw material			$               1.65
Direct material quantity variance	-		$       3,960.00
Summary
Particulars	Amount	Nature
Materials quanity variance	$      3,960.00	Favorable
Materials price variance	$ (16,320.00)	Unfavorable

Direct labor variances
Particulars	Amount
Standard rate per direct labor hour	$                  14.00
Less: actual rate per direct labor hour	$                  13.05
Rate variance per diret labor hour	$                    0.95
× direct labor hours worked	8,560
Direct labor rate variance	$            8,132.00
Particulars	Hours per unit	× actual output	Total
Standard direct labor hours required for actual output	0.20	42,000	8,400.00
Less: actual direct labor hours worked for actual output			8,560.00
Difference in direct labor hours			(160.00)
× standard rate per hour of direct labor hour			$            14.00
Direct labor efficiency variance	-		$     (2,240.00)
Summary
Particulars	Amount	Nature
Direct labor efficiency variance	$           (2,240.00)	Unfavorable
Direct labor rate variance	$            8,132.00	Favorable

Variable overhead variances
Particulars	Amount
Standard rate per direct labor hour	$            11.90
Less: actual rate per direct labor hour	$            11.63
Rate variance per diret labor hour	$              0.27
× direct labor hours worked	$      8,560.00
Variable overhead rate variance	$      2,312.00
Particulars	Hours per unit	× actual output	Total
Standard direct labor hours required for actual output	0.20	42,000.00	8,400.00
Less: actual direct labor hours worked for actual output			8,560.00
Difference in direct labor hours			(160.00)
× standard rate per hour of direct labor hour			$            11.90
Variable overhead efficiency variance	-		$     (1,904.00)
Summary
Particulars	Amount	Nature
Variable overhead efficiency variance	$     (1,904.00)	Unfavorable
Variable overhead rate variance	$      2,312.00	Favorable

Actual variable overhead = $163,200 X 61% = $99,552

Overhead per hour = $99,552/ 8,560 = $11.63

Fixed overhead variances
Particulars	Rate per unit	× units	Total
Flexible budget fixed overhead cost applicable for actual production	$              1.60	42,000.00	$     67,200.00
Less: Actual fixed overhead costs			$     63,648.00
FOH budget (spending) variance			$       3,552.00
Particulars	Hours per unit	× output	Total
Standard direct labor hours required for budgeted output	0.20	40,000.00	8,000.00
Less: Standard direct labor hours required for actual output (hours applied)	0.20	42,000.00	8,400.00
Difference in direct labor hours			(400.00)
× standard rate per hour of direct labor hour			$               0.32
FOH volume variance	-		$        (128.00)
Summary
Particulars	Amount	Nature
FOH volume variance	$        (128.00)	Unfavorable
FOH budget (spending) variance	$      3,552.00	Favorable

Actual fixed overhead = $163,200 X 39% = $63,648

Budgeted production is 40,000 units.

Budgeted fixed overhead for 40,000 units = $159,200 total overhead - $40,000 units X $11.9 X 0.2 hours (for variable overhead) = $64,000 and it comes to $1.60 per unit

Please rate.