Question

	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	2,090	units
12	Actual variable manufacturing overhead cost	$6,174
13		Actual Quantity		Actual price
14	Actual direct materials cost	6,115	pounds	$3.9	pounds
15	Actual direct labor cost	980	hours	$22.3	per hour
16

Requirement 2:

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

  

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

a1.

Material Quantity variance = Standard Price * (Actual Quantity used - Standard Quantity)

Material Quantity variance = $4 * (6,115 - (2,090*3)

Material Quantity variance = $620 F

a2.

Material Price variance = Actual Quantity * (Actual Price - Standard Price)

Material Price variance = 6,115 * ($3.90-$4)

Material Price variance = $611.50 F

b1.

Labour efficeincy variance = Standared rate * (Actual Hours - Standard Hours)

Labour efficeincy variance = $22 * (980 - (2,090*0.50))

Labour efficeincy variance = $1,430 F

b2.

Labour rate variance = Actual hours * (Actual Price-Actual Quantity)

Labour rate variance = 980 * ($22.3 - $22)

Labour rate variance = $294 U

c1.

Variable overhead efficiency variance = Standard overhead rate * (Actual hours - standard hours)

Variable overhead efficiency variance = $6 * (980 - (2,090*0.50)

Variable overhead efficiency variance = $390 F

c2.

Variable overhead rate variance = (Actual hours * Standard variable overhead rate) - Actual manufacturing variable overhead expense

Variable overhead rate variance = (980 * $6) - $6,174

Variable overhead rate variance = $294 U