Question

INSTRUCTIONS: Prepare the variances and identify whether they are favorable or unfavorable.              

The below website will provide further assistance with variances:http://accounting-simplified.com/management/variance-analysis/material/price.html DATA FOR VARIANCE ANALYSIS:                                                            

"Standard Hours / Qty" "Standard Rate"               "Actual Hours / Qty"       "Actual Rate"    

Grooming Labor               150       $12.00 180       $11.50

Grooming Materials        1,000    $2.00    1,200    $3.00   

Variance              "Favorable/Unfavorable"             

Groomer Direct Labor Time Variance (Actual Hours - Standard Hours) x Standard Rate $-  

Groomer Direct Labor Rate Variance (Actual Rate - Standard Rate) x Actual Hours               $-                                

Direct Materials Quantity/Efficiency Variance (Actual Quantity - Standard Quantity) x Standard Price$-  

Direct Materials Price Variance (Actual Price - Standard Price) x Actual Quantity                               $-                        

Answer 1

• All working forms part of the answer
• All Variances asked:

Direct Labour Time Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	150	-	180	)	x	$                        12.00
	-360
	Variance		$                  360.00			Unfavourable-U

Direct Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                     12.00	-	$                    11.50	)	x	180
	90
	Variance		$                    90.00			Favourable-F

Direct Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	1000	-	1200	)	x	$                           2.00
	-400
	Variance		$                  400.00			Unfavourable-U

Direct Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                        2.00	-	$                       3.00	)	x	1200
	-1200
	Variance		$              1,200.00			Unfavourable-U