Solution a:
Budgeted contribution margin per unit = $315 - ($40 + $28 + 0.5*$180) = $157 per unit
Actual sales volume = Budgeted sales volume - (Unfavorable sales activity variance / Budgeted contribution margin per unit)
= 132000 - ($942,000 / $157) = 126000 liters
Direct Material Cost Variance | ||||||||||||
Actual Cost | Standard cost for actual quantity | Standard Cost | ||||||||||
AQ * | AP = | AQ * | SP = | SQ * | SP = | |||||||
208000 | $20.28 | $4,218,000.00 | 208000 | $20.00 | $4,160,000.00 | 252000 | $20.00 | $5,040,000.00 | ||||
$58,000.00 | U | $880,000.00 | F | |||||||||
Direct Material Price Variance | Direct Material efficiency variance |
Solution b:
Direct Labor Cost Variance | ||||||||||||
Actual Cost | Standard cost for actual quantity | Standard Cost | ||||||||||
AH * | AR = | AH * | SR = | SH * | SR = | |||||||
56400 | $60.46 | $3,410,000.00 | 56400 | $56.00 | $3,158,400.00 | 63000 | $56.00 | $3,528,000.00 | ||||
$251,600.00 | U | $369,600.00 | F | |||||||||
Direct Labor rate Variance | Direct Labor Efficiency Variance |
Solution c:
Variable Overhead Cost Variance | ||||||||||||
Actual Cost | Standard cost for actual quantity | Standard Cost | ||||||||||
AH * | AR = | AH * | SR = | SH * | SR = | |||||||
56400 | $190.25 | $10,730,000.00 | 56400 | $180.00 | $10,152,000.00 | 63000 | $180.00 | $11,340,000.00 | ||||
$578,000.00 | U | $1,188,000.00 | F | |||||||||
Variable overhead rate variance | Variable overhead efficiency variance |
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