X company produces a plastic furniture set for outdoor use. The company\'s stand

Question

X company produces a plastic furniture set for outdoor use. The company's standard costs per set follow: During the month, the company produced 200 furniture sets. Actual data for March 2016 are as follows The company purchased 2,300 kilograms of direct material at a cost of $13,000. The company had no beginning inventory and had 50 kilograms of material on hand at the end of March 2016. The direct labor workforce worked a total of 420 hours and was paid a total of $5,800. Variable overhead of $1,555 and fixed overhead of $600 were incurred. The predetermined overhead rates were developed using a capacity of 180 furniture sets during the month and budgeted to use 360 direct labor hours. Accordingly, the company's variable overhead was budgeted to be $1,350 for the month. Fixed overhead was budgeted to be $450 for the month. Calculate the following: Material price variance based on quantity purchased. Material quantity variance. Labor rate variance. Labor efficiency variance. Variable overhead spending and efficiency variances. Fixed overhead spending and volume variances. Controllable variance. Total Overhead variance.

Explanation / Answer

*Maximum of 4 questions answered

Material Variance Quantity Variance Standard Cost per unit (Actual usage per unit - Standard usage per unit) Std cost per unit $6 Actual usage per unit (2300-50)                                                                                                                                          2,250.00 Standard usage per unit                                                                                                                                          2,000.00 Material Quantity Variance                                                                                                                                          1,500.00 (Favourable) Price Variance Actual Quantity used *(Actual Price - Standard Price) Actual Quantity                                                                                                                                          2,250.00 Actual Price 5.65 Standard Price                                                                                                                                                   6.00 Material Price Variance                                                                                                                                            (782.61) (Adverse) Total Material Variance                                                                                                                                              717.39 Favourable Labour Variance Labour Price Variance Actual hours *(Actual rate - standard rate) Actual hours                                                                                                                                              420.00 Actual rate 13.81 Standard rate                                                                                                                                                15.00 Labour Price Variance                                                                                                                                            (500.00) Adverse Labour Quantity Variance Standard Rate *(Actual Hours - Standard Hours) Standard Rate                                                                                                                                                15.00 Actual Hours                                                                                                                                              420.00 Standard Hours                                                                                                                                              400.00 Labour Quantity Variance 300.00 Favourable Total Labour Variance                                                                                                                                            (200.00) Adverse

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