Question

Exercise 10-23 Determination of Variances Using Diagrams (LO 10-3)

Exercise 10-23 Determination of Variances Using Diagrams (LO 10-3) Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct Labor: Quantity, 8.16 hour Rate, $8.00 per hour Direct Material: Quantity, 9 kilograms Price, $0.42 per kilogram Actual material purchases amounted to 233,200 kilograms at $0.47 per kilogram. Actual costs incurred in the production of 22,000 units were as follows: Direct labor: Direct material: $33,264 for 3,960 hours $98,230 for 286,880 kilograms Required: Fill in the amounts In the tables below.

Answer 1

solution computation of Direct material Price and Quantity variances Direct material Price variance (standard Pricet) Actual Price) X Actual quantity used = (stand and Price X Actual quantity used) - (Actual Price x Actual quantity used = 0.42X206 800 (0) 98.230 86,8566-198.236 11.374 unfavourable Direct material usage variance = (standard quantity & Standard Price )) Actual quantity & Standard Price - (22,000x 9x0.42) - (2.06,800 X 0.42) - 83.160 (-) 86,856 e 2696 unfavouvable

direct materical Purchale Brice @ computation of variance m = (standard Price (-) Actual Price) & Actual quantity purchased = 0.42-0.475) x 2.33,200 = 19,826 Unfavourable Notes Actual Price = 98.230 - o.ufs. 206,800 ③ computation as direct labour rate and efficiency variance w Direct labour rate variance - (standard rate - Actual rat) & Actual hours = (883,960) - 33,264 | = 31,680 - 33.26u = 1580 unfavourable Direct labour efficiency variance - (standard hour - Actual houv) Standard robo ( 22.000X0.16 - 3.960 ) x 823,520 unfavourable