Question

1. Compute the direct material, direct labor and variable overhead variances. S 5 ? - X X] H FILE Basic variance analysis for direct materials, direct labor and variable overhead - Excel INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW HOME Sign In * Calibri Calibri 111 A A = % V ö Paste B I U - A ont Number Conditional Format as Cell Alignment Number Formatting Table Styles - Cells Editing Clipboard B Font x Styles 41 : fc The standard cost card for a single unit of Robinson, Inc.'s products is shown Α D E F G C The standard cost card for a single unit of Robinson, Inc.'s products is shown below. 1 Standard Price/Rate 4 Direct materials: 5 Direct labor: 6 Variable overhead (based on labor hours): Standard Quantity 2.5 yards @ 0.5 hours @ 0.5 hours @ $8.00 per yard $18.00 per hour $10.00 per hour Standard Unit Cost $20.00 9.00 5.00 14,000 units 13,500 units 8 Budgeted production for the month 9 Actual production for the month 10 11 Actual Costs Incurred to Produce 13,500 units: 12 Direct Materials Purchased and Used 13 Direct Labor Paid 35,100 yards @ 7,425 hours @ $7.00 per yard $17.50 per hour Total Actual Cost $245,700 $129,938

Answer 1

Calculation of Direct Material, Direct Labour and Variable Overhead variances

1) Direct Material Variance = (Standard Quantity* Standard Price) - (Actual quantity* Actual price)

(2.5*13500*8) - (35100*7)

270000-245700

24300 (F)

2) Direct Labour variance =(Standard Hours * Standard Price) - (Actual Hours * Actual price).

(0.5*13500*18) - (7425*17.5)

121500 - 129938

8438 (A)

3) Variable Overhead Variance = (Standard Hours * Standard Price) - (Actual Hours * Actual price).

(0.5*13500*10) - (7425*12)

67500 - 89100

21600(A)

Computation of Material Price,Material Usage,Labour Rate,Labour Efficiency,Variable Expenditure, Variable Efficiency Variances

1) Material Price Variance= (SP-AP)*AQ

(8-7) *35100

35100(F)

2) Material Usage Variance = (SQ-AQ)*SP

(33750-35100) *8

10800(A)

3) Labour Rate Variance = (SR-AR)*AH

(18-17.5)*7425

3712 (F)

4) Labour Efficiency Variance = (SH-AH)*SR

(6750-7425)*18

12150(A)

5) Variable Expenditure Variance= (SR-AR)*AH

(10-12)*7425

14850(A)

6) Variable Efficiency Variance = (SH-AH)*SR

(6750-7425)*10

6750(A)