Problem

Classifying variances as favorable or unfavorableRequiredIndicate whether each of the foll...

Classifying variances as favorable or unfavorable

Required

Indicate whether each of the following variances is favorable or unfavorable. The first one has been done as an example.

Item to Classify

Standard

Actual

Type of Variance

Labor cost

$10.00 per hour

$9.60 per hour

Favorable

Labor usage

61,000 hours

61,800 hours

 

Fixed cost spending

$400,000

$390,000

 

Fixed cost per unit (volume)

$3.20 per unit

$3.16 per unit

 

Sales volume

40,000 units

42,000 units

 

Sales price

$3.60 per unit

$3.63 per unit

 

Materials cost

$2.90 per pound

$3.00 per pound

 

Materials usage

91,000 pounds

90,000 pounds

 

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