Question

References Review View Help Open in Desktop App Tell me what you want 1 Α' Α' Β Ι Ο ν Αν Α. v Ev Question 1: CNC Company's Budget and actual costs per unit are provided below for the most recent period. During this period, 600 units were actually produced. Product Standard Cost Product Actual Cost $10.00 $11.44 Materials Standard Actual Direct labour Standard Actual Variable overhead Standard Actual Total unit cost Metres 5 5.2 Hours 3 3.2 Unit Price Per Metre $2.00 $2.20 Hourly Rate $5.00 $5.50 $15.00 $17.60 Hours Hourly Rate $12.00 4 4.2 $3.00 $3.10 $13.02 $42.06 $37.00 Ronnirod.

Answer 1

Req1

Material price variances

Formula =standard cost of actual quantity - Actual cost

=5.2meters×600units×2per meter-11. 44per unit×600units

=6240-6846

=-624(unfavorable)

Req2

Formula=Standard cost of standard quantity for actual production -standard cost of actual quantity

Standard quantity for actual output=600units×5m per unit

=3000meters

Actual quantity=600units×5.2m per unit

=3120

=(3000-3120) ×2

=-240(unfavorable)

Req3

Direct labour rate variance

Formula=standard cost of actual time-actual cost

Actual time =600units×3.2hrs

=1920hrs

=5per hr×1920-1920hrs×5.5per hr

=-960(unfavorable)

Req4

Direct labour efficiency variance

Formula=standard cost of standard time for actual production - standard cost of actual production

Standard time for actual production=600units×3hrs per unit

=1800hrs

=(1800-1960) ×5

=-800(unfavorable)

Req 5

Variable overhead rate variancevariance

Formula=standard variable overhead for actual hours-actual variable overhead

Actual hours=4.2×600

=2520hrs

=3×2520-2520×3.1

=-252(unfavorable)

Req6

Variable overhead efficiency variance

Formula=standard variable overhead for production - standard variable overhead for actual production

=(SH-AH) ×SR

Standard hours=600unts×4hrs

=2400

=(2400-2520) ×3

=-360(unfavorable)

Req7

From above calculations we can simply say that company not have proper control on budget so company needed to improve controos on its budget