In: Accounting
A manufactured product has the following information for
June.
Standard | Actual | |||
Direct materials | (6 lbs. @ $8 per lb.) | 48,500 | lbs. @ $8.10 per lb. | |
Direct labor | (2 hrs. @ $16 per hr.) | 15,700 | hrs. @ $16.50 per hr. | |
Overhead | (2 hrs. @ $12 per hr.) | $ | 198,000 | |
Units manufactured | 8,000 |
1. Compute the standard cost per unit. 2. Compute the total cost variance for June. Indicate whether the cost variance is favorable or unfavorable. |
Data for calculation of Variance | |||||||||
Standard | Standard Cost for 8000 Units | Actual for 8000 Units | |||||||
Units | Rate | Total | Units | Rate | Total | Units | Rate | Total | |
Material | 6 | 8.00 | 48.00 | 48,000.00 | 8.00 | 384,000.00 | 48,500.00 | 8.10 | 392,850.00 |
Labour | 2 | 16.00 | 32.00 | 16,000.00 | 16.00 | 256,000.00 | 15,700.00 | 16.50 | 259,050.00 |
Ovehead | 2 | 12.00 | 24.00 | 16,000.00 | 12.00 | 192,000.00 | 15,700.00 | 12.61 | 198,000.00 |
1.
Standard Cost for 8000 Units | ||
Units | Rate | Total |
48,000.00 | 8.00 | 384,000.00 |
16,000.00 | 16.00 | 256,000.00 |
16,000.00 | 12.00 | 192,000.00 |
2.
Material price Variance= | (SP-AP)*AQ | (8-8.10)*48500 | (4,850) | Unfavourable |
Material Quantity Variance= | (SQ-AQ)*Sp | (48000-48500)*8 | (4,000) | Unfavourable |
Labour Rate Variance | (SR-AR)*AH | (16-16.50)*15700 | (7,850) | Unfavourable |
Labour Quantity Variance | (SH-AH)*SR | (16000-15700)*16 | 4,800 | Favourable |
Variable Overhead Rate Variance | (SR-AR)*AH | (12-12.61)*15700 | (9,577) | Unfavourable |
Variable Overhead Quantity Variance | (SH-AH)*SR | (16000-15700)*12 | 3,600 | Favourable |
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