In: Accounting
Ans. A | Materials price variance = (Standard price * Actual quantity purchased) - Actual materials purchased cost | ||
($16 * 21,000) - $357,000 | |||
$336,000 - $357,000 | |||
-$21,000 | or $21,000 unfavorable | ||
Ans. B | Materials quantity variance = (Standard quantity - Actual quantity used) * Standard price | ||
(33,600 - 33,400) * $16 | |||
200 * $16 | |||
$3,200 | Favorable | ||
Ans. C | Labor rate variance = (Standard rate * Actual hours) - Actual labor cost | ||
($8 * 16,750) - $134,000 | |||
$134,000 - $134,000 | |||
$0 | |||
Ans. D | Labor efficiency variance = (Standard hours - Actual hours) * Standard rate | ||
(16,800 - 16,750) * $8 | |||
50 * $8 | |||
$400 | Favorable | ||
Ans. E | Variable overhead is based on direct labor hours, therefore in the calculation of | ||
variable overhead variances, the standard and actual direct labor hours will remain same. | |||
Variable Overhead rate variance = (Standard rate * Actual hours) - Actual variable overhead cost | |||
($3 * 16,750) * $48,575 | |||
$50,250 * $48,575 | |||
$1,675 | Favorable | ||
Ans. F | Variable overhead efficiency variance = (Standard hours - Actual hours) * Standard rate | ||
(16,800 - 16,750) * $3 | |||
50 * $3 | |||
$150 | Favorable | ||