The materials price variance is recognized when materials are purchased. Variabl
ID: 2451121 • Letter: T
Question
The materials price variance is recognized when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.
Compute the materials quantity variance. (Input the amount as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Compute the materials price variance. (Input the amount as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Compute the labor efficiency variance. (Input the amount as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Compute the direct labor rate variance. (Input the amount as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Compute the variable overhead efficiency variance. (Input the amount as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your answer to the nearest dollar amount.)
Compute the variable overhead rate variance. (Input the amount as positive value. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your answer to the nearest dollar amount.)
Blomdahl Corporation makes a product with the following standard costs:
Explanation / Answer
b. Material Price Varience:-
Actual quantity of material purchased ( Standard price per unit - Actual price per unit)
= 47850 ( 6.40 - 6.10)
= 14355 (F)
a. Material quantity variance:-
= Standard price ( Standard quantity for actual output - Actual quantity used in production)
= 6.40 [44820(NOTE 1) - 46480 ]
= 10624 (U)
(NOTE 1) Standard quantity for actual output = 8300 * 5.40 = 44820
c. Labor efficiency varience:-
= Standard rate (Standard hours for actual output - Actual hours used)
= 23 [ 2490(NOTE 2) - 2988 ]
= 11454 (U)
(NOTE 2) :- Standard hours for actual output = 8300 * 0.30 = 2490
d. Labor rate variance:- = Actual hours ( Standard rate - actual rate)
= 2988 ( 23 - 24.5)
= 4482 (U)
e. Variable overhead efficiency variance:- = Standard rate ( Standard hours for actual output - Actual hours)
= 2.40 [2490(Note 3)- 2988]
= 1195.2 (U)
(NOTE 3) :- Standard hours for actual output = 8300 * 0.30 = 2490
f. Variable overhead rate variance = Actual hours (Standard rate - actual rate)
= 2988 ( 2.40 - 2.20)
= 597.6 (F)
Conclusion:-
Note:- (F) denotes Favourable & (U) denotes Unfavourable.
Material Quantity variance 10624 (U) Material price variance 14355 (F) Labor efficiency variance 11454 (U) Labor rate variance 4482 (U) Variable overhead efficiency variance 1195.2 (U) Variable overhead Rate variance 597.6 (F)Related Questions
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