Question

Michiana Company's Benton Harbor Plant produces precast ingots for industrial use Angelo Lorenzo, who was recently appointed general manager of the Benton Harbor Plant, has just been handed the plant's contribution format income statement for October. The statement is shown below: Budgeted $ 265,000 Actual 265,000 Sales (6,000 ingots) Variable expenses: Variable cost of goods sold" Variable selling expenses 95,580 14.000 112,700 14.000 109,580 126,700 Total variable expenses 155,420 138,300 Contribution margin Fixed expenses Manufacturing overhead 63.000 78.000 63.000 78.000 < Prey 2 of 3 !!! Next То е в 9 re to search

Answer 1

1-a)	Material price variance
	(Actual price - standard price )* AQ purchased
	(2.75-2.30)*28400
	12780	U
	Materials Quantity variance
	(AQ used - SQ allowed)*Standard price
	(23200 -6000*3.9)*2.3
	460	F
1-b)	Labor rate variance
	(Actual rate - standard rate)*Actual hours
	(6.6-6.90)*5400
	1620	F
	Labor Efficiency variance
	(Actual hours - standard hours allowed)* Std rate
	(5400 -6000*.8)*6.9
	4140	U
1-c)	Variable overhead rate variance
	(Actual rate - standard rate)*Actual machinehours
	(10,920 - 3900*2.4)
	1560	U
	Variable overhead Efficiency variance
	(Actual hours - standard hours allowed)* Std rate
	(3900 -6000*.6)*2.4
	720	U
2)	Net Variance		17,120	U
	Material price variance				12,780	U
	Material quantity variance				460	F
	labor rate variance				1620	F
	labor efficiecny variance				4140	U
	variable overhead rate variance				1560	U
	variable overhead efficiency variance				720	U
	net variance				17,120	U
3)	material price variance
	labor effiency variance