Ans. 1 | Actual Cost | Actual quantity at Standard price | Standard Cost | |||
Actual quantity * Actual price | Actual quantity * Standard price | Standard quantity * Standard price | ||||
31,000 * $5.80 | 31,000 * $5.75 | 31,500 * $5.75 | ||||
$179,800 | $178,250 | $181,125 | ||||
-$1,550 | $2,875 | |||||
Materials price variance | -$1,550 | or $1,550 Unfavorable | ||||
Materials quantiy variance | $2,875 | or $2,875 Favorable | ||||
Total Materials Variance | $1,325 | or $1,325 Favorable | ||||
*Materials price variance = Actual quantity at standard price - Actual cost | ||||||
*Materials quantity variance = Standard cost - Actual quantity at standard price | ||||||
*Standard quantity (SQ) = Actual output * Materials quantity per unit of output | ||||||
63,000 * 0.50 pounds | ||||||
31,500 | ||||||
*If the standard cost, price and quantity are higher than the actual it means the variance is favorable. | ||||||
*If the standard cost, price and quantity are lower than the actual it means the variance is unfavorable. | ||||||
Ans. 2 | Actual Cost | Actual quantity at Standard price | Standard Cost | |||
Actual hours * Actual rate | Actual hours * Standard rate | Standard hours * Standard rate | ||||
10,600 * $20.50 | 10,600 * $21.50 | 10,710 * $21.50 | ||||
$217,300 | $227,900 | $230,265 | ||||
$10,600 | $2,365 | |||||
Labor rate variance | $10,600 | Favorable | ||||
Labor efficiency variance | $2,365 | Favorable | ||||
Total Labor Variance | $12,965 | Favorable | ||||
*Labor rate variance = Actual quantity at standard price - Actual cost | ||||||
*Labor efficiency variance = Standard cost - Actual quantity at standard price | ||||||
*Total labor variance = Labor rate variance + Labor efficiency variance | ||||||
*Actual rate = Actual labor cost / Actual hours | ||||||
$217,300 / 10,600 | ||||||
$20.50 | per hour | |||||
*Standard hours per unit of output = 10 minutes = 10 / 60 = 0.17 hours | ||||||
Standard hours = Actual output * standard hours per unit of output | ||||||
63000 units * 0.17 hours | ||||||
10,710 hours | ||||||
*If the standard cost, rate and hours are higher than the actual it means the variance is favorable. | ||||||
*If the standard cost, rate and hours are lower than the actual it means the variance is unfavorable. | ||||||
The following describes production activities of Mercer Manufacturing for the year. Actual direct materials used Actual...
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