Question

In: Accounting

The following data were drawn from the records of Finch Corporation. Planned volume for year (static...

The following data were drawn from the records of Finch Corporation.

Planned volume for year (static budget)

4,700

units

Standard direct materials cost per unit

2.40

pounds

@

$

1.70

per pound

Standard direct labor cost per unit

2.80

hours

@

$

3.40

per hour

Total expected fixed overhead costs

$

23,970

Actual volume for the year (flexible budget)

5,100

units

Actual direct materials cost per unit

2.10

pounds

@

$

2.30

per pound

Actual direct labor cost per unit

3.10

hours

@

$

2.90

per hour

Total actual fixed overhead costs

$

19,770

Required

Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity.

Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).

Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.

Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).

Calculate the predetermined overhead rate, assuming that Finch uses the number of units as the allocation base.

Calculate the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfavorable (U).

Calculate the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfavorable (U).

Required A

Materials Variance Information Table

Standard price

per pound

Actual price

per pound

Standard quantity for flexible budget

pounds

Actual quantity used

pounds

Required B

Material price variance

U

Material usage variance

F

Required C

Labor Variance Information Table

Standard price

per hour

Actual price

per hour

Standard hours for flexible budget

Actual hours used

Required D

Labor price variance

F

Labor usage variance

U

Required D

e.

Predetermined overhead rate

per unit

f.

Fixed cost spending variance

F

g.

Fixed cost volume variance

F

Solutions

Expert Solution

1) STANDARD PRICE PER POUND 1.7
ACTUAL PRICE PER POUND 2.3
STANDARD QUANTITY ON FLEXIBLE BUDGET(5100*2.4) 12240
ACTUAL QUANTITY(5100*2.10) 10710
2) Calculate Material Variance
Material price variance(standard price - Actual price)*Actual quantity
(1.7-2.3)*12240 -6426 unfavorable
Material usage variance=(standard quantity-Actual quantity)*standard price
(12240-10710)*1.7 2601 Favorable
3)
STANDARD PRICE PER HOUR 3.4
ACTUAL PRICE PER HOUR 2.9
STANDARD HOUR FOR FLEXIBLE BUDGET(5100*2.8) 14280
ACTUAL HOUR (5100*3.1) 15810
4) Labor rate variance ( standard rate - actual rate )*actual hours
(3.4-29)*15810 7905 Favorable
Labor efficiency variance ( Standard hours- Actual hours)* standard price
(14280-15810)*3.4 -5202 unfavorable
5) predetemined overhead rate (23970/4700) 5.1 per unit
Fixed cost spending variance
Actual -budegeted
19770-23970 -4200 favorable
Fixed cost volume variance
(5.1*5100)-23970 2040 favorable

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