Calculation |
Answer |
|||
1 |
(1) Total material variance: |
Actual total direct material cost – Total standard cost for actual quantity |
||
2 |
=$ 235,200 - $ 12 x 20,500 |
($ 10,800) |
F |
|
3 |
=$ 235,200 - $ 246,000 = -$ 10,800 |
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4 |
||||
5 |
Material price variance: |
(Actual price – Standard price) x Actual quantity |
($ 16,800) |
F |
6 |
=($ 2.8 - $ 3) x 84,000 |
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7 |
=- $ 0.2 x 84,000 = - $ 16,800 |
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8 |
||||
9 |
Material quantity variance: |
(Actual quantity - Standard quantity) x Standard price per unit |
$ 6,000 |
U |
10 |
=(84,000 – 82,000) x $ 3 |
|||
11 |
= 2,000 x $ 3 = $ 6,000 |
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12 |
||||
13 |
(2) Total labor variance: |
Actual total labor cost – Total standard labor cost for actual quantity |
$ 26,500 |
U |
14 |
= $ 518,500 - $ 24 x 20,500 |
|||
15 |
= $ 518,500 - $ 492,000 = $ 26,500 |
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16 |
||||
17 |
Labor price variance: |
(Actual rate – Standard rate) x Actual labor hours |
$ 30,500 |
U |
18 |
= ($ 8.5 - $ 8) x 61,000 |
|||
19 |
= $ 0.5 x 61,000 = $ 30,500 |
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20 |
||||
21 |
Labor quantity variance: |
(Actual hours used - Standard hours allowed) x Standard rate |
($ 4,000) |
F |
22 |
= (61,000 – 61,500) x $ 8 |
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23 |
= -500 x $ 8 = - $ 4,000 |
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24 |
||||
25 |
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26 |
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27 |
Total overhead variance |
Actual overhead – Total standard overhead allowed |
($6,000) |
F |
= $ 240,000 - $ 12 x 20,500 |
||||
= $ 240,000 - $ 246,000 = - $ 6,000 |
Explanation:
Total material variance = Actual total direct material cost – Total standard cost for actual quantity
= $ 235,200 - $ 12 x 20,500 = $ 235,200 - $ 246,000
= -$ 10,800 F
Actual price of direct material = Total material cost/Total units purchased
= $ 235,200/84,000 = $ 2.8/lb
Direct material price variance = (Actual price – Standard price) x Actual quantity
= ($ 2.8 - $ 3) x 84,000 = - $ 0.2 x 84,000 = - $ 16,800 F
Standard quantity of material required for actual production = Unit standard quantity x actual unit
= 4 x 20,500 = 82,000 pounds
Direct material quantity variance = (Actual quantity - Standard quantity) x Standard price per unit
= (84,000 – 82,000) x $ 3 = 2,000 x $ 3 = $ 6,000 U
Total material variance = Actual total labor cost – Total standard labor cost for actual quantity
= $ 518,500 - $ 24 x 20,500 = $ 518,500 - $ 492,000
= $ 26,500 U
Actual labor rate = Total labor cost/total hour worked = $ 518,500/61,000 = $ 8.5 PLH
Direct labor price variance = (Actual rate – Standard rate) x Actual quantity
= ($ 8.5 - $ 8) x 61,000 = $ 0.5 x 61,000 = $ 30,500 U
Standard labor hours allowed = Unit standard labor hour x Actual unit produced
= 3 x 20,500 = 61,500 Hrs
Direct labor quantity variance = (Actual hours used - Standard hours allowed) x Standard rate
= (61,000 – 61,500) x $ 8 = -500 x $ 8 = - $ 4,000 F
Total overhead variance = Actual overhead – Total standard overhead
= $ 240,000 - $ 12 x 20,500 = $ 240,000 - $ 246,000 = - $ 6,000 F
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