Scenario: | |||||
Delmar Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly, showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period: | |||||
Standard costs (per unit of output) | |||||
Direct materials, 6 gallons @ $4.00 per gallon | $24 | ||||
Direct labor, 4 hours @ $40 per hour | 160 | ||||
Factory overhead | |||||
Variable (25% of direct labor cost) | 40 | ||||
Total standard cost per unit | $224 | ||||
Actual costs and activities for the month follow: | |||||
Materials used | 15,120 gallons at $3.60 per gallon | ||||
Output | 2,280 units | ||||
Actual labor costs | 6,400 hours at $44 per hour | ||||
Actual variable overhead | $72,900 | ||||
REQUIRED | |||||
Prepare a cost variance analysis for the variable costs. |
in $ | Calculation | |||
Direct Material | Cacluation | |||
Price Variance A | 6048 | F | (15120*3.6)-(15120*4) | |
Efficiency variance B | 5760 | U | 4*(15120-(2280*6)) | |
Direct Material cost variance A-B | 288 | F | ||
Direct labor | ||||
Price Variance D | 25600 | U | (6400*44)-(6400*40) | |
Efficiency variance C | 108800 | F | 40*(6400-(2280*4)) | |
Direct Labor cost variance C-D | 83200 | F | ||
Variable overhead | ||||
Price Variance E | 8900 | U | 72900-(6400*10) | |
Efficiency variance F | 27200 | F | 10*(6400-(2280*4)) | |
Variable cost cost variance | 18300 | F | ||
Variable overhead rate | ||||
($40*25%) | $10 | per DLH | ||
If any doubt please comment |
Scenario: Delmar Products prepares its budgets on the basis of standard costs. A responsibility report is prepared...
Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period: Standard costs (per unit of output) Direct materials, 6 gallons @ $2.00 per gallon $ 12 Direct labor, 3 hours @ $36 per hour 108 Factory overhead Variable (25% of direct labor cost) 27...
Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period: Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no...
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