Variance Part A The following standard costs per unit have been established by John, Inc.: Material...

Variance

Part A

The following standard costs per unit have been established by John, Inc.:

Material (3 kilograms at $2 per kilogram) $ 6.00
Direct labor (2 hours at $12 per hour) $ 24.00

During the month, John produced 1,100 units, which was 100 more units than planned.

They used 3,400 kilograms and 2,050 hours to do so.

Total actual materials spending was $6,460, while total actual labor spending was $27,675.

Required

Choose EITHER materials OR labor, and compute the following variances:

Spending
Efficiency
Activity

Be sure to denote which you chose (materials or labor) and label each variance as favorable or unfavorable.

Part B

Meghan Company sells two products – Deluxe and Ultra.

The following information was gathered about the two products:

	Deluxe	Ultra
Budgeted sales in units	3,200	800
Budgeted selling price (unit)	$300	$850
Actual sales in units	3,500	1,500
Actual selling price (unit)	$325	$840

Required

Calculate the three main revenue variances for the Meghan product.

Be sure to label the variances by name, as well as “favorable” or “unfavorable.”

If there is insufficient information to calculate any of the variances, please denote that clearly.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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