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In: Accounting
The following is information related to X Company, a company that uses a standard cost system:...
The following is information related to X Company, a company that uses a standard cost system:
Standard cost card for 1 unit of Product A:
Direct materials – Raw Material A (1 kilogram @ $ 20/kg.) $ 20
Direct materials – Raw Material B (1 kilogram @$ 10/kg.) $ 10
Direct labour (1 hour @ $15/hr.) $ 15
Variable overhead (1 hour @ $ 5/hr.) $ 5
Fixed overhead (1 hour @ $ 10/hr.) $ 10
Total budgeted fixed overhead: $ 1,000
Budget total units of production: 100 units
Actual units produced 88 units
Actual costs incurred: Total
Direct materials – Raw Material A (130 kilograms $ 2,860
Direct materials – Raw Material B ( 60 kilograms) $ 660
Direct labour (100 hours) $ 1,600
Variable overhead (100 hours) $ 480
Fixed overhead $ 1,120
Required:
Prepare a 5-column analysis, with the columns as follows: Actual, Cost Variances, Flexible Budget, Volume Variance, Master Budget
Calculate the direct labour variances.
Calculate the two variable overhead variances.
Calculate the direct material variances..
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| Actual | Cost Variance | Flexible | Volume Variance | Master | |||||||||
| $ | Result | $ | Result | ||||||||||
| Units | 88 | 88 | 100 | ||||||||||
| Raw Material A | $ 2,860 | $ 1,100 | U | $ 1,760 | $ 240 | F | $ 2,000 | ||||||
| Raw Material B | $ 660 | $ 220 | F | $ 880 | $ 120 | F | $ 1,000 | ||||||
| Direct Labor | $ 1,600 | $ 280 | U | $ 1,320 | $ 180 | F | $ 1,500 | ||||||
| Variable Overhead | $ 480 | $ 40 | U | $ 440 | $ 60 | F | $ 500 | ||||||
| Fixed Overhead | $ 1,120 | $ 240 | U | $ 880 | $ 120 | F | $ 1,000 | ||||||
| Total | $ 6,720 | $ 1,440 | U | $ 5,280 | $ 720 | F | $ 6,000 | ||||||
| Material A | Material B | ||||||||||||
| Standard Material Price | $ 20.00 | Standard Material Price | $ 10.00 | ||||||||||
| Standard Quantity | 88*1 | 88 | Standard Quantity | 88*1 | 88 | ||||||||
| Actual Quantity Purchased | 130 | Actual Quantity Purchased | 60 | ||||||||||
| Actual Quantity used | 130 | Actual Quantity used | 60 | ||||||||||
| Actual Matrial Price | 2860/130 | $ 22.00 | Actual Matrial Price | 660/60 | $ 11.00 | ||||||||
| Material Price Variance | AQ(AP-SP) | Material Price Variance | AQ(AP-SP) | ||||||||||
| (Actual Price | - | Standard Price) | * | Actual Quantity | (Actual Price | - | Standard Price) | * | Actual Quantity | ||||
| $ 22.00 | - | $ 20.00 | * | 130 | $ 11.00 | - | $ 10.00 | * | 60 | ||||
| $ 260 | Unfavorable | $ 60 | Unfavorable | ||||||||||
| Material Quantity Variance | SP(AQ-SQ) | Material Quantity Variance | SP(AQ-SQ) | ||||||||||
| (Actual Quantity | - | Standard Qty) | * | Standard Price | (Actual Quantity | - | Standard Qty) | * | Standard Price | ||||
| 130 | - | 88 | * | $ 20.00 | 60 | - | 88 | * | $ 10.00 | ||||
| $ 840.00 | Unfavorable | $ -280.00 | Favorable | ||||||||||
| Direct Labor | |||||||||||||
| Standard Hour Rate | $ 15.00 | ||||||||||||
| Standard Hour | 88*1 | 88 | |||||||||||
| Actual Hours | 100 | ||||||||||||
| Actual Hour Rate | 1600/100 | $ 16.00 | |||||||||||
| Labor Rate Variance | AH(AR-SR) | ||||||||||||
| (Actual Rate | - | Standard Rate) | * | Actual Hours | |||||||||
| $ 16.00 | - | $ 15.00 | * | 100 | |||||||||
| $ 100 | Unfavorable | ||||||||||||
| Labor Efficiency Variance | SR(AH-SH) | ||||||||||||
| (Actual Quantity | - | Standard Qty) | * | Standard Price | |||||||||
| 100 | - | 88 | * | $ 15.00 | |||||||||
| $ 180 | Unfavorable | ||||||||||||
| Variable Overhead | |||||||||||||
| Standard Hour Rate | $ 5.00 | ||||||||||||
| Standard Hour | 88*1 | 88 | |||||||||||
| Actual Hours | 100 | ||||||||||||
| Actual Hour Rate | 480/100 | $ 4.80 | |||||||||||
| Labor Rate Variance | AH(AR-SR) | ||||||||||||
| (Actual Rate | - | Standard Rate) | * | Actual Hours | |||||||||
| $ 4.80 | - | $ 5.00 | * | 100 | |||||||||
| $ -20 | Favorable | ||||||||||||
| Labor Efficiency Variance | SR(AH-SH) | ||||||||||||
| (Actual Quantity | - | Standard Qty) | * | Standard Price | |||||||||
| 100 | - | 88 | * | $ 5.00 | |||||||||
| $ 60 | Unfavorable | ||||||||||||
ekkarill92 answered 3 years agoRelated Solutions
The following is information related to X Company, a company that uses a standard cost system:...
The following is information related to X Company, a company
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