Question

Algonquin Adhesive Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6lb of materials at an estimated cost of $2 per pound. The estimated cost of labor is $10.00 per hour. The plant estimates that overhead (all variable) for a month will be $40,000. During the month of March, the plant totaled 34,800 direct labor at an average rate of $9.50 an hour. The plant produce 18,000 units, using 105,000 lb of materials ar a cost of $2.04 per pound. Assuming that during the month of April the production report revealed the following information: Unit produced during the month 21,000 Direct labor hours for the month 41,000, materials purchased (in pounds) 125,000, Labor rate per hour $10.04, Materials cost per pound $1.98.
Make journal entries to charge materials (use the materials purchase price variance) and labor to work in process.

I have calculated the Factory overhead for the standard the 1st and 2nd month.
Fixed overhead= $4,000, 4000, 4000
Variable overhead =12,000, 11,100 and 12,300
Total =16,000, 15,100, 16,300

I need help with how to figure out the Budget Actual and Variance for month 1 and 2

Answer 1

	Particulars	March	April
a)	Budgeted material per unit(lbs)	6	6
	units produced	18000	21000
	Budgeted Material	108000	126000
	Budgeted price	$            2.00	$           2.00
	Actual price	$            2.04	$           1.98
	Actual Material Used	105000	125000
	Material Usuage Variance	$    6,000.00	$   2,000.00
	Material Price Variance	$ (4,320.00)	$   2,520.00
	Material Total variance	$    1,680.00	$   4,520.00
b)	Budgeted Hours	36000	42000
	Actual hours	34800	41000
	Budgeted cost per unit	10	10
	Actual cost per unit	$            9.50	$         10.04
	Direct labor price variance	$ 18,000.00	$ (1,680.00)
	Direct Labor quantity Variance	$ 12,000.00	$ 10,000.00
	Direct Labor total variance	$ 30,000.00	$   8,320.00
	Material usuage variance	=budgeted price( budgeted material-actual material used)
	Material pRice variance	=budgeted quantity( budgeted price-actual price)
	Direct labor price variance	=budgeted Hours( budgeted price-actual price)
	Direct Labor quantity Variance	=budgeted price( budgeted HOurs-actual HOurs)