Question

Revise the data in your worksheet to reflect the results for the subsequent period as shown below:

	A	B	C	D	E	F
1	Chapter 8: Applying Excel
2
3	Data
4	Exhibit 8-8: Standard Cost Card
5	Inputs	Standard Quantity		Standard Price
6	Direct materials	3.0	pounds	$4.00
7	Direct labor	0.50	hours	$22.00	per hour
8	Variable manufacturing overhead	0.50	hours	$6.00	per hour
9
10	Actual results:
11	Actual output	2,190	units
12	Actual variable manufacturing overhead cost	$7,906
13		Actual Quantity		Actual price
14	Actual direct materials cost	6,530	pounds	$4.3	pounds
15	Actual direct labor cost	1,340	hours	$22.1	per hour
16

a-1.	What is the materials quantity variance? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

      

a-2.	What is the materials price variance? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

      

b-1.	What is labor efficiency variance? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

      

b-2.	What is labor rate variance? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

      

c-1.	What is variable overhead efficiency variance? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

      

c-2.	What is variable overhead rate variance? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

     

Answer 1

For your information;

SQ = Standard Quantity

AQ = Actual quantity

SP = Standard price

AP = Actual price

AH = Actula hours

SH = Standard Hours

SR = Standard rate

AR = Actual rate

1. Material Quantity variance = SQ x SP-AQ x SP

= 3 x2190 x 4 - 6530 x 4

   = 26280-26120 = 160 (F)

2. Material price variance = AQ x SP- AQx AP

   = 6530 x 4 - 6530 x 4.3

   = -1959 (U)

3. Labour efficiency variance = SH X SR - AH x SR

   = 2190 x .5 x 22 - 1340 x 22

   = 24090 - 29480 = 5390 (U)

4. Labour rate variance =SR x AH - AR x AH

= 22 x 1340 - 22.1 x 1340

   = 29480-29614 = 134 (U)

5.variable overhead efficiency variance = (Standard hours for actual product - Actual hours )x Standard overhead rate per hour

   = (2190 x .5 -1340 ) x 6

   = 1470 (U)

6. variable overhead rate variance    = Budgeted variable overhead for actual hours - Actual variable    overhead

   = 2190 x .5 x 6 -7906

   = 1336 (U)