Question

a corneci PROBL - Comprehensive Variance Analysis LOS A LOS-5. LOS-5 SEEDS 5575.000 5675.000 Warrace goods Soc . 135.000 455.000 220.000 561890 20.000 481.890 193.1.10 Manufacturing overhead 130.000 34.000 Seiling and administrative Ota frec ardenses 214.000 $ 6.000 Met operating income foss, ains direct materiais direct labocard verable manufacturing overhead 130.000 84.000 214.000 $20.990

Answer 1

Answer with full working is given below

1 Direct Material Variances a) Direct Material Price Variance $3,000 Favourable b) Direct Material Quantity Variance -$21,000 Unfavourable Direct Material Price Variance = ( Standard Rate - Actual Rate) * Actual Quantity Direct Material Quantity Variance = (Standard Quantity for Actual production - Actual Quantity) * Standard Rate Working note Actual price Actual Quantity Standard Actual Rate Actual Quantity Standard cost Standard Quantity Standard Rate 60,000 Actual Quantity at Actual Rate $4.95 49,200 $297,000 Actual Qty at Standard rate $5.00 45,000 $246,000 Standard Qty at Std rate $5.00 $225,000 Direct Material price variance Direct Material Quantity variance $3,000 Favourable $21,000 Unfavourable Total Direct Material cost Variance -$18,000 Unfavourable Direct Labor Variance c) Direct Labor Rate Variance -$11,800 Unfavourable d) Direct Labor Efficiency Variance $3,200 Favourable Direct Labor Rate Variance = ( Standard Rate - Actual Rate) * Actual hours Direct Labor Efficiency Variance = (Standard hours for Actual production - Actual hours) * Standard Rate Working note Actual price Standard Actual Rate Standard cost Standard hours Standard Rate Actual Hours Actual Hours Rate 11,800 Actual labor hours at actual rate $17.000 11,800 $200,600 Actual labor hours at std rate $16.00 12,000.00 $188,800 Standard hours at std rate $16.00 $192,000 Direct Labor Rate Variance Direct Labor Efficiency Variance $11,800 Unfavourable $3,200 Favourable Total Direct Labor Cost variance -$8,600 Unfavourable Variable Overhead variance e) Variable Overhead Rate variance -$590 Unfavourable f) Variable Overhead Efficiency variance $300 Favourable Variable Overhead Rate Variance = (Standard Rate - Actual Rate) * Actual hours Variable Overhead Efficiency Variance = (Standard hours for Actual production - Actual hours) * Standard Rate Working note Actual price Actual Rate Standard cost Standard hours Standard Rate Actual Hours Actual Hours X Standard Rate 5,900 Actual Variable OH at actual rate $3.10 5,900 $18,290 Actual Variable OH at std rate $3.00 6,000 $17,700 Standard Variable OH at std rate $3.00 $18,000 Variable OH Spending Variance Variable Overhead Efficiency Variance -$590 $300 Favourable Unfavourable Total Variable Overhead variance -$290 Unfavourable Direct Material Direct Labor Variable Overhead Total Price/Rate/Spending Variance $3,000 Favourable -$11,800 Unfavourable -$590 Unfavourable -$9,390 Unfavourable Quantity/Efficiency Variance | -$21,000 Unfavourable $3,200 Favourable $300 Favourable -$17,500 Unfavourable Overall variance is Unfavourable $26,890 Unfavourable