Question

Rip Tide Company manufactures surfboards. Its standard cost information follows: Standard Quantity 15 sq. ft. 10 hrs. Standar
Required: 1. Calculate the direct materials price, quantity, and total spending variances for Rip Tide. 2. Calculate the dire
Required: 1. Calculate the direct materials price, quantity, and total spending variances for Rip Tide. 2. Calculate the dire
Required: 1. Calculate the direct materials price, quantity, and total spending variances for Rip Tide. 2. Calculate the dire
Required: 1. Calculate the direct materials price, quantity, and total spending variances for Rip Tide. 2. Calculate the dire
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Answer #1

Solution 1:

Direct Material Cost Variance
Actual Cost Standard cost for actual quantity Standard Cost
AQ * AP = AQ * SP = SQ * SP =
5030 $5.50 $27,665.00 5030 $5.00 $25,150.00 4845 $5.00 $24,225.00
$2,515.00 U $925.00 U
Direct Material Price Variance Direct Material Qty variance
Direct material price variance $2,515.00 U
Direct material quantity variance $925.00 U
Direct material cost variance $3,440.00 U

Solution 2:

Direct Labor Cost Variance
Actual Cost Standard cost for actual quantity Standard Cost
AH * AR = AH * SR = SH * SR =
3170 $15.70 $49,769.00 3170 $15.00 $47,550.00 3230 $15.00 $48,450.00
$2,219.00 U $900.00 F
Direct Labor rate Variance Direct Labor Efficiency Variance
Direct Labor Rate variance $2,219.00 U
Direct Labor Efficiency variance $900.00 F
Direct labor cost variance $1,319.00 U

Solution 3:

Variable Overhead Cost Variance
Actual Cost Standard cost for actual quantity Standard Cost
AH * AR = AH * SR = SH * SR =
3170 $4.63 $14,690.00 3170 $6.00 $19,020.00 3230 $6.00 $19,380.00
$4,330.00 F $360.00 F
Variable overhead rate variance Variable overhead efficiency variance
Variable overhead rate variance $4,330.00 F
Variable overhead efficiency variance $360.00 F
Variable overhead cost variance $4,690.00 F

Solution 4:

Fixed Overhead Cost Variance
Actual Fixed OH Cost Budgeted Fixed Overhead Standard Cost (FOH Applies)
SH* BR
$25,150.00 $24,000.00 3230 $8.00 $25,840.00
$1,150.00 U $1,840.00 F
Fixed overhead Budget Variance Fixed overhead volume variance
Fixed overhead Budget Variance $1,150.00 U
Fixed overhead volume variance $1,840.00 F
Total Fixed overhead variance $690.00 F
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