Determining amount and type (favorable vs. unfavorable) of variance
Required
Compute variances for the following items and indicate whether each variance is favorable (F) or unfavorable (U).
Item | Budget | Actual | Variance | F or U |
Sales price | $650 | $525 |
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Sales revenue | $580,000 | $600,000 |
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Cost of goods sold | $385,000 | $360,000 |
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Material purchases at 5,000 pounds | $275,000 | $280,000 |
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Materials usage | $180,000 | $178,000 |
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Production volume | 950 units | 900 units |
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Wages at 4,000 hours | $60,000 | $58,700 |
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Labor usage at $16 per hour | $96,000 | $97,000 |
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Research and development expense | $22,000 | $25,000 |
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Selling and administrative expenses | $49,000 | $40,000 |
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