Question

Chapter 10: Applying Excel: Exercise (Part 2 of 2) Requirement 2: Revise the data in your worksheet to reflect the results for the subsequent period as shown below: A 1 Chapter 10: Applying Excel 3 4 Data Exhibit 10-1: Standard Cost Card Inputs 6 Direct materials Standard Quantity 3.0 pounds 0.50 hours 0.50 hours Standard Price 4.00 per pound 22.00 per hour 6.00 per hour 7 Direct labor Variable manufacturing overhead 8 9 10 Actual results: 11 Actual output Actual variable manufacturing overhead cost 12 13 1,860 units 5,493 Actual Quantity 5,745 pounds 845 hours 14 Actual direct materials cost Actual direct labor cost $ $ Actual price 4.40 per pound 21.80 per hour 15

Answer 1

(A)

Material quantity variance = standard price x (standard quantity - actual quantity used)

= $4 x (5580 - 5745)

= $660 Unfavorable

Where,

Standard quantity = actual output x standard quantity per unit of output

= 1860 x 3 = 5580 pounds

(B)

Material price variance = actual quantity purchased x (standard price - actual price)

= 5745 x ($4 - $4.40)

= $2298 Unfavorable

(C)

Labor efficiency variance = standard rate x (standard hours - actual hours)

= $22 x (930 - 845)

= $1870 Favorable

Where,

Standard hours = actual output x standard hours per unit of output

= 1860 x 0.50 = 930 hours

(D)

Labor rate variance = actual hours x (standard rate - actual rate)

= 845 x ($22 - $21.80)

= $169 Favorable