Question

I know you can only answer the first four but if you could include the formulas for the other 2 I would appreciate it. Thanks

30. The labor rate variance for March is: A) $4,578 unfavorable. B) $1,470 unfavorable. C) $4,578 favorable. D) $1,470 favorable. QUESTIONS 28 THROUGH 33 ARE BASED ON THE FOLLOWING INFORMATION: Cox Engineering performs cement core tests in its laboratory. The following standards have been set for each core test performed: 31. The labor efficiency variance for March is: A) $480 favorable. B) $480 unfavorable. C) $192 favorable. D) $192 unfavorable. Direct materials, 3 pounds @ $0.75 per pound. Direct labor, 0.4 hours @ $12.00 per hour. Variable factory overhead, 0.4 hours @ $4.00 per hour. Fixed factory overhead, 0.4 hours @ $10.00 per hour. 32. The variable overhead rate variance for March is: A) $320 unfavorable. B) $320 favorable. C) $160 unfavorable. D) $160 favorable. Manufacturing overhead is assigned to core tests on the basis of direct labor hours. Budgeted fixed manufacturing overhead for the period was $8,000. The denominator activity used for determining the overhead rates was 2,000 core tests or 800 direct labor hours. On March 1 no direct materials (sand) were on hand. The following events occurred during March: 33. The variable overhead efficiency variance for March is: A) $320 unfavorable B) $320 favorable. C) $160 unfavorable. D) $160 favorable. 8,600 pounds of sand were purchased at a cost of $7,310. 7,200 pounds of sand were used for core tests. 840 actual direct labor hours were worked at a cost of $8,610. Actual variable manufacturing overhead incurred was $3,200. Actual fixed manufacturing overhead incurred was $8,100. The company actually performed 2,000 core tests during the month. 28. The materials price variance computed on the basis of the quantity purchased for March is: A) $860 unfavorable. B) $860 favorable. C) $281 unfavorable. D) $281 favorable. 29. The materials quantity (efficiency) variance for March is: A) $ 900 favorable. B) $1,950 favorable. C) $1,950 unfavorable. D) $ 900 unfavorable.

Answer 1

28) Materials Price Variance – The correct option is A) $860 Unfavorable

Material Price Variance is the variance arises in the material cost due to difference in actual material purchase price from standard material price. Mathematically, it is calculated as below:

Material Price Variance = Actual Quantity (Standard Price – Actual Price)

Note --- Here actual quantity means actual quantity of material PURCHASED. If the question does not provide the information about material purchase, it is taken as equal to material consumed.

Direct Material Price Variance
Actual Price (Actual Cost $7,310 / Actual quantity purchased 8,600 pounds)	$0.85	per pound
Standard Price	$0.75	per pound
Variance or Difference in Price	$0.10	per pound
x Actual Quantity PURCHASED	8,600	pounds
Direct Material Price Variance	$860	Unfavorable

29) Material Quantity/Efficiency/Usage Variance – The correct option is D) $900 Unfavorable

Material Efficiency (Usage) Variance measures variance in material cost due to usage/consumption of materials. It is calculated as below:

Material Quantity Variance = Standard Price (Standard Quantity for Actual Production – Actual Quantity USED)

Note --- Here actual quantity means actual quantity of material CONSUMED/USED

Direct Material Quantity/Efficiency/Usage Variance
Standard Quantity Allowed for actual production:
Actual Production/Activity	2000	tests
x Allowed Standard Quantity Per Unit	3	Pounds
Total Standard Quantity Allowed for actual production (SQAP)	6,000	Pounds
Actual Quantity USED	7,200	pounds
Variance or Difference in Quantity	1,200	pounds
x Standard Price (SP)	$0.75	per pound
Material Quantity/Efficiency Variance	$900	Unfavorable

30) Labor Rate/Price Variance – The correct option is D) $1,470 Favorable

Labor Price Variance – It arises due to difference in actual rate paid from standard rate. It is calculated as below:

Labor Price Variance = Actual Time (Standard Rate per hour – Actual Rate per hour)

Here, actual time means time for which wage has been paid.

Labor Rate Variance
Actual Hourly Rate (Actual Cost $8,610 / Actual Labor Hours 840)	$10.25	Per Hour
Standard Hourly Rate	$12.00	Per Hour
Variance or Difference in Rate	$1.75	Per Hour
x Actual Labor Hours worked	840	Hours
Labor Rate Variance	$1,470	Favorable

31) Labor Quantity Variance – The correct option is B) $480 Unfavorable

Labor Efficiency Variance – It arises due to variation in the working hours from the set standard.

Labor Quantity / Efficiency Variance
Standard Hours Allowed for actual production:
Actual Production	2000	Tests
x Allowed Standard Hours Per Unit	0.4	hours
Total Standard Hours Allowed for actual production (SHAP)	800	hours
Actual Labor Hours Worked	840	hours
Variance or Difference in Hours	40	hours
x Standard Hourly Rate (SHR)	$12	per hour
Labor Efficiency Variance	$480	Unfavorable

32) Variable Overhead Rate Variance – the correct option is D) $160 favorable

Variable Overhead Rate Variance
Actual Hourly Variable Overhead Rate ($3,200 Actual / 840 Actual Labor Hours)	3.81	Per Hour
Standard Hourly Variable Overhead Rate	4.00	Per Hour
Variance or Difference in Rate	0.19	Per Hour
x Actual Hours Worked	840	Hours
Variable Overhead Rate Variance	$160	Favorable

33) Variable Overhead Efficiency Variance – The correct option is C) $160 Unfavorable

Variable Overhead Efficiency/Quantity Variance
Standard Hours Allowed for actual production:
Actual Production	2,000	Pools
x Allowed Standard Hours Per Unit	0.4	Hours
Total Standard Hours Allowed for actual production (SHAP)	800	Hours
Actual Hours Worked (AH)	840	Hours
Variance or Difference in Hours	40	hours
x Standard Hourly Variable Overhead Rate	$4.00	per hour
Variable Overhead Efficiency Variance	$160	Unfavorable

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you